Foreign company is a company or body corporate incorporated outside India which –
(a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and
(b) conduct any business activity in India in any other manner.
Simple definition give understanding that even a company incorporated outside India, has simple electronic present, which may be used for business in India is a foreign company.
APPLICATION OF THIS ACT TO FOREIGN COMPANIES (SECTION 379):
Whether not less than fifty percent of the paid up capital of a foreign company is held by –
(a) one or more citizen of India, or
(b) one or more companies or bodies corporate incorporated in India, or
(c) partly by both of them;
whither singly or in aggregate, such company shall comply the provision of Chapter XXII and other prescribed provisions of this Companies Act, 2013 with regard to the business carried on by it in India as if it were a company incorporated in India.
DOCUMENT ETC TO BE DELIVERED TO THE REGISTRAR (SECTION 380):
Every foreign company shall, within thirty days of the establishment of its place of business in India, deliver to the Registrar for registration –
(a) a certified copy of the charter, statute or memorandum and articles of the company or other instrument constituting or defining the constitution of the company and if the instrument is not in English language, a certified translation thereof in the English language;
(b) the full address of the registered or principal office of the company;
(c) a list of the directors and secretary of the company with particulars;
(d) the names and addresses of one or more persons resident in India authorised to accept on behalf of the company service of process and any notices or other documents required to be served on the company;
(e) the full address of the office of the company in India which is deemed to be its principal place of business in India;
(f) particulars of opening and closing of a place of business in Indian on earlier occasions;
(g) declaration that none of the directors of the company or authorised representative in India has ever been convicted or debarred from formation of companies and management in India or abroad; or
(h) other prescribed particulars.
Where any alternation is made or occurs in the documents delivered to the Registrar, the foreign company shall, within thirty days of such alteration, deliver to the Registrar for registration, a return containing the particulars of the alteration.
ACCOUNTS OF FOREIGN COMPANY (SECTION 381):
Every foreign company, unless exempted, shall in every calendar –
(a) make out a balance sheet and profit and loss account; and
(b) deliver a copy of those documents to the Registrar.
If any of these documents is not in English Language, there shall be annexed to it a certified translation thereof in English language.
Every foreign company shall send to the Registrar along with these documents, a copy of a list of all places of business established by the company in India as on date of the Balance Sheet made out.
DISPLAY OF NAME ETC OF FOREIGN COMPANY (SECTION 382):
Every foreign company shall –
(a) conspicuously exhibit on the outside of every office or place where it carries on business in India, the name of the company and the country of its incorporation in legible letters in English, and also in the language in general use in the locality in which the office or place is situate;
(b) cause the name of the company and of the company of incorporation to be stated in legible English characters in all business letters, bill – heads and letter papers, and in all notices and other official publications of the company; and
(c) if the liability of the members of the company is limited, cause notice of that fact –
- to be stated in every prospectus issued and in all business letters, bill – heads, letter paper, notices, advertisements and other official publications of the company, in legible English characters, and
- to be conspicuously exhibited on the outside of every office or place where it carries on business in India, in legible English characters and also in legible characters of the a local language.
SERVICE ON FOREIGN COMPANY (SECTION 383):
Any process, notice or other document required to be served on a foreign company shall be deemed to be served if served to any authorised person named as per section 380.
OTHER APPLICABLE SECTIONS (SECTION 384):
The provisions of section 71 shall apply mutatis mutandis to a foreign company.
The provisions of section 92 shall, subject to such exceptions, modifications and adaptations as may be made therein by rules made under this Act, apply to a foreign company as they apply to a company incorporated in India.
The provisions of section 128 shall apply to a foreign company to the extent of requiring it to keep at its principal place of business in India, the books of account referred to in that section, with respect to monies received and spent, sales and purchases made, and assets and liabilities, in the course of or in relation to its business in India.
The provisions of Chapter VI shall apply mutatis mutandis to charges on properties which are created or acquired by any foreign company.
The provisions of Chapter XIV shall apply mutatis mutandis to the Indian business of a foreign company as they apply to a company incorporated in India.
FEE FOR REGISTRATION OF DOCUMENTS (SECTION 385):
There shall be paid to the Registrar for registering any document required by the provisions of this Chapter to be registered by him such fee as may be prescribed.
INTERPRETATION (SECTION 386):
The expression “certified” means certified in the prescribed manner to be a true copy or a correct translation.
The expression “director”, in relation to a foreign company, includes any person in accordance with whose directions or instructions the Board of Directors of the company is accustomed to act.
The expression “place of business” includes a share transfer or registration office.
We will discuss other provisions related to foreign companies in next blog post.
Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.
Pingback: Establishing Foreign Company | AishMGhrana
Pingback: FINANCIAL STATEMENT OF FOREIGN COMPANY | AishMGhrana
Please advise whether Companies Incorporated Outside India which do not satisfy the requirements of Section 379 ( Chapter XII ) of the Companies Act 2013 ( the ACT ) will be totally exempt from carrying out any obligations laid down for foreign companies in the ACT notwithstanding the company falling under the definition of a foreign company in subsection 42 of Section 2.
Only a foreign company, which satisfy requirement of Section 379 shall carry out obligation under Chapter XXII. All other foreign companies are exempted.
Then what about the other foreign companies which do not come under the ambit of section 379. Chapter 22 is not at all applicable to them? Companies Act 2013 is not at all applicable to them?
Pingback: Index of Companies Law Posts | AishMGhrana