Companies Incorporated Outside India

In one line

A company incorporated outside India which has a place of business in India must file its constitution, address, directors and Indian agent with the Registrar within thirty days, keep accounts of its Indian business, display its name and country of incorporation, and answer service on its Indian representative; a prospectus it issues in India must satisfy the Act; and until it complies with the Chapter it may be sued but cannot sue.

In exam wording: section 2(42) defines a foreign company, section 380 the documents to be delivered, section 381 the accounts, section 382 the display of name, section 383 service, sections 387 to 389 the prospectus, section 392 the punishment, and section 393 the effect of non-compliance.

Why the law has this at all

A company incorporated abroad is not created by Indian law and cannot be dissolved by it. Yet it may take deposits in Mumbai, employ people in Pune and sell to customers in Nagpur, and those Indians deal with a legal person they cannot investigate: they do not know who owns it, who directs it, what its constitution permits, or where to serve a writ.

Chapter XXII does not try to regulate the foreign company. It regulates the information available about it and the accessibility of it in India, and that is the theme of every section.

Who and what it is: the constitution, the registered office abroad, the directors and secretary, all filed under section 380.

Where to find it: the principal place of business in India under section 380(1)(e), and the name and country displayed on every office and letter under section 382.

How to serve it: on the person resident in India authorised to accept service, under sections 380(1)(d) and 383.

What it does here: accounts of the Indian business under section 381 and books kept at the principal place of business in India under section 384(3).

And the sanction is designed for a defendant who is out of the jurisdiction. Fining a foreign company is often futile, so section 393 takes away the one thing it cannot do without: the right to sue in India.

Some words this chapter uses

A foreign company is defined in section 2(42) as a 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. A place of business includes a share transfer or registration office: section 386(c). Certified means certified in the prescribed manner to be a true copy or correct translation. An expert is one whose statement appears in a prospectus.