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FOREIGN COMPANY

WHAT IS A FOREIGN COMPANY

A 'foreign company' is an entity which is incorporated outside India, but has a place of business in India or conducts any business activity in India in any manner. The accurate definition of foreign company is given under the Companies Act, 2013 though the concept of 'foreign company' was existent in the older act as well.

SECTIONS/REGULATIONS/RULES/SCHEDULE APPLICABLE TO A FOREIGN COMPANY

  • Section 2(42) of the Companies Act, 2013;
  • CompaniesRegistration of Foreign Companies) Rules, 2014

FOREIGN COMPANYUNDER COMPANIES ACT, 2013

AS PER SECTION 2(42) OF COMPANIES ACT 2013 READ WITH COMPANIES INCORPORATION RULE, 2014; A foreign company is any company or body corporate incorporated outside India which;

  • Has a place of business in India whether by itself or through an agent, physically or through electronic mode; and
  • Conducts any business activity in India in any other manner.

ELECTRONIC MODE

The Companies (Specification of Definitions Details) Rules, 2014 defines the term 'electronic mode' in the context of a foreign company under Rule 2(h). The same is also defined under Rule 2 (1)(c) of Companies (Registration of Foreign Companies) Rules, 2014.

The definition of electronic mode states activities carrying out electronically, whether main server is installed in India or not, including but not limited to

  • Business to business and business to consumer transactions, data interchange and other digital supply transactions;
  • offering to accept deposits or inviting deposits or accepting deposits or subscriptions in securities in India or from citizens of India;
  • financial settlements, web-based marketing, advisory and transactional services, database services and products, supply chain management;
  • online services such as telemarketing, telecommuting, telemedicine, education and information research; and
  • all related data communication services.

DOCUMENTS ETC., TO BE DELIVERED TO REGISTRAR BY FOREIGN COMPANIES:

Every Foreign company is required to submit these documents to the Registrar for registration, within 30 days of the establishment of its place of business in India

  • Certified copy of the charter, statutes 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 the English language, a certified translation thereof in the English language;
  • Full address of the registered or principal office of the company
  • List of the directors and secretary of the company containing such particulars as prescribed under Rule 3.
  • Name and address or 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
  • Full address of the office of the company in India which is deemed to be its principal place of business in India
  • Particulars of opening and closing of a place of business in India on earlier occasion or occasions
  • Declaration that none of the directors of the company or the authorized representative in India has ever been convicted or debarred from formation of companies and management in India or abroad.
  • Other Documents as may be prescribed.

Rule 3(3) of the Companies (Registration of Foreign Companies) Rules, 2014 requires application in Form FC-1 to be supported with an attested copy of approval from the Reserve Bank of India under Foreign Exchange Management Act and the rules and regulations thereunder or a declaration from the authorised representative of such Foreign Company that no such approval is required.

And Rule 3(4) provides that in case of any alteration in the aforesaid documents the Foreign Company is require to submit a return in Form FC-2 containing the particulars of alteration as per the prescribed format with the Registrar of Companies, within 30 days of any such alteration.

 
     
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