Foreign Company: Companies Act, 2013

The Companies Act, 2013 is the principal legislation governing companies in India. It regulates the formation, management, and operation of companies in the country. The Act applies to both domestic and foreign companies. In this article, we will discuss the provisions of the Companies Act, 2013 that are applicable to foreign companies.

Definition of Foreign Company

The Companies Act, 2013 defines a foreign company as a company or a body corporate incorporated outside India which has a place of business in India. The term 'place of business' is defined to include any branch, office, factory, or other establishment that a foreign company has in India, whether or not it is conducted with a view to making a profit.

Registration of Foreign Company

A foreign company that has a place of business in India is required to register itself with the Registrar of Companies (ROC) within 30 days of the establishment of its place of business in India. The registration process involves filing various documents with the ROC, including a copy of the charter, statutes or memorandum and articles of the foreign company, a list of the directors and secretary of the company, and the full address of the registered or principal office of the company.

Appointment of an Authorized Representative

A foreign company that has a place of business in India is required to appoint at least one authorized representative who is a resident of India to act as a point of contact between the company and the Indian authorities. The authorized representative is responsible for ensuring compliance with various provisions of the Act and for representing the company in legal proceedings.

Obligations of Foreign Companies

Foreign companies that have a place of business in India are required to comply with various provisions of the Companies Act, 2013. Some of the key obligations of foreign companies are as follows:

1. Maintenance of Books of Accounts: Every foreign company is required to maintain proper books of accounts relating to its Indian operations.

2. Filing of Annual Return and Financial Statements: Every foreign company is required to file its annual return and financial statements with the ROC in the prescribed form and manner.

3. Appointment of Auditors: Every foreign company is required to appoint an auditor to audit its accounts in India.

4. Compliance with Indian Laws: Every foreign company is required to comply with all Indian laws that are applicable to it, including tax laws, labor laws, and environmental laws.

5. Disclosure of Information: Every foreign company is required to disclose information about its Indian operations to the Indian authorities as and when required.

6. Use of Corporate Name: A foreign company that has a place of business in India is required to use its corporate name along with the name of the country in which it is incorporated.

Branch Office of Foreign Company

A foreign company that has a place of business in India can carry on its activities in India either through a branch office or through a liaison office. A branch office is an extension of the foreign company and can carry on any activity that the foreign company is authorized to carry on. A branch office is subject to Indian tax laws and is required to pay taxes on its income earned in India.

Liaison Office of Foreign Company

A liaison office is a place of business in India that is established by a foreign company to act as a channel of communication between the foreign company and its customers in India. A liaison office is not permitted to carry on any commercial activity in India and is not subject to Indian tax laws.

Conclusion

The Companies Act, 2013 provides a comprehensive framework for the regulation of foreign companies that have a place of business in India. The Act requires foreign companies to register with the ROC, appoint an authorized representative, and comply with various provisions of the Act. Foreign companies that have a place of business in India are required to maintain proper books of accounts, file their annual return and financial statements with the