REGISTRATION OF FOREIGN COMPANIES
Companies (Registration of Foreign Companies) Rules, 2014 prescribes guidelines to be followed for the registration of a foreign company.
Particulars relating to directors and Secretary to be furnished to the Registrar by foreign Companies:
1. Every foreign company shall, within thirty days of establishment of its place of business in India, in addition to the particulars specified in subsection (1) of section 380 of the Act (i.e, Companies Act, 2013), also deliver to the Registrar for registration, a list of directors and Secretary of such company.
2. The list of directors and secretary or equivalent (by whatever name called) of the foreign company shall contain the prescribed particulars, for each of the persons included in such list.
3. (3) A foreign company shall, within a period of thirty days of the establishment of its place of business in India, file with the registrar Form FC-1 with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 and with the documents required to be delivered for registration by a foreign company in accordance with the provisions of sub-section (1) of section 380 and the application shall also be supported with an attested copy of approval from the Reserve Bank of India under Foreign Exchange Management Act or Regulations, and also from other regulators, if any, approval is required by such foreign company to establish a place of business in India or a declaration from the authorized representative of such foreign company that no such approval is required.
4. (4) Where any alteration is made or occurs in the document delivered to the Registrar for registration under sub-section (1) of section 380, the foreign company shall file with the Registrar, a return in Form FC2 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 containing the particulars of the alteration, within a period of thirty days from the date on which the alteration was made or occurred.
Financial Statement of foreign company:
Every foreign company shall prepare financial statement of its Indian business operations in accordance with Schedule III or as near thereto as may be possible for each financial year including-
i. documents required to be annexed thereto in accordance with the provisions of Chapter IX of the Act i.e. Accounts of Companies
ii. documents relating to copies of latest consolidated financial statements of the parent foreign company , as submitted by it to the prescribed authority in the country of its incorporation under the provisions of the law for the time being in force in that country:
Provided that where such documents are not in English language, there shall be annexed to it a certified translation thereof in the English language:
iii. Such other documents as may be required to be annexed or attached in accordance with sub-rule (2).
2. Every foreign company shall, along with the financial statement required to be filed with the Registrar, attach thereto the following documents; namely:-
a. Statement of related party transaction, which shall include-
i. (i) name of the person in India which shall be deemed to be the related party within the meaning of clause (76) of section 2 of the Act of the foreign company or of any subsidiary or holding company of such foreign company or of any firm in which such foreign company or its subsidiary or holding company is a partner;
ii. nature of such relationship;
iii. description and nature of transaction;
iv. amount of such transaction during the year with opening ,closing, highest and lowest balance during the year and provisions made (if any) in respect of such transactions;
iv. reason of such transaction;
vi. material effect of such transaction on both the parties;
vii. amount written off or written back in respect of dues from or to the related parties;
viii. a declaration that such transactions were carried out at arms’ length basis; and
ix. any other details of the transaction necessary to understand the financial impact;
b. Statement of repatriation of profits which shall include-
i. amount of profits repatriated during the year;
ii. recipients of the repatriation;
iii. form of repatriation;
iv. dates of repatriation;
v. details if repatriation made to a jurisdiction other than the residence of the beneficiary;
vi. mode of repatriation; and
vii. approval of the Reserve Bank of India or any other authority, if any.
c. Statement of transfer of funds (including dividends if any) which shall, in relation of any fund transfer between place of business of foreign company in India and any other related party of the foreign company outside India including its holding, subsidiary and associate company, include-
i. date of such transfer;
ii. amount of fund transferred or received;
iii. mode of receipt or transfer of fund;
iv. purpose of such receipt or transfer; and
v. approval of Reserve Bank of India or any other authority, if any.
3. The documents referred to in this rule shall be delivered to the Registrar within a period of six months of the close of the financial year of the foreign company to which the documents relate.
Provided that the Registrar may, for any special reason, and on application made in writing by the foreign company concerned, extend the said period by a period not exceeding three months.
Audit of accounts of foreign company:
1. Every foreign company shall get its accounts, pertaining to the Indian business operations prepared in accordance with the requirements of clause (a) of sub-section (1) of section 381 and rule 4, audited by a practicing Chartered Accountant in India or a firm or limited liability partnership of practicing chartered accountants.
2. The provisions of Chapter X i.e. Audit and Auditors and rules made there under, as far as applicable, shall apply, mutatis mutandis, to the foreign company.
List of places of business of foreign company:
Every foreign company shall file with the Registrar, along with the financial statement, in Form FC.3 with such fee as provided under Companies (Registration Offices and Fees) Rules, 2014 a list of all the places of business established by the foreign company in India as on the date of balance sheet.
Every foreign company shall prepare and file, within a period of sixty days from the last day of its financial year, to the Registrar annual return in Form FC.4 along with such fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 containing the particulars as they stood on the close of the financial year.
Office where documents to be delivered and fee for registration of documents:
1. Any document which any foreign company is required to deliver to the Registrar shall be delivered to the Registrar having jurisdiction over New Delhi, and references to the Registrar in Chapter XXII of the Act i.e. Companies Incorporated outside India and these rules shall be construed accordingly.
2. The fee to be paid to the Registrar for registering any document relating to a foreign company shall be such as provided in the Companies (Registration Offices and Fees) Rules, 2014.
3. If any foreign company ceases to have a place of business in India, it shall forthwith give notice of the fact to the Registrar, and as from the date on which notice is so given, the obligation of the company to deliver any document to the Registrar shall cease, provided it has no other place of business in India.
A copy of any charter, statutes, memorandum and articles, or other instrument constituting or defining the constitution of a Foreign company shall be duly certified to be a true copy in the manner given below:
1. If the company is incorporated in a country outside the Commonwealth-
a. the copy aforesaid shall be certified as a true copy by-
- i. an official of the Government to whose custody the original is situated; or
- ii. a Notary (Public) of such Country; or
- iii. an officer of the company.
b. The signature or seal of the official referred to in sub-clause (i) of clause (a) or the certificate of the Notary (Public) referred to in sub-clause (ii) of clause (a) shall be authenticated by a diplomatic or consular officer empowered in this behalf under section 3 of the Diplomatic and Consular Officers (Oaths and fees) Act, 1948 (XL of 1948), or where there is no such officer, by any of the officials mentioned in section 6 of the Commissioners of Oath Act, 1889 (52 and 53 Vic. C. 10), or in any relevant Act for the said purpose.
c. (c) The certificate of the officer of the company referred to in sub-clause (iii) of clause (a) shall be signed before a person having authority to administer an oath as provided under section 3 of the Diplomatic and Consular Officers (Oath and Fees) Act, 1948 (XL of 1948), or as the case may be, by section 3 of the Commissioners of Oath Act, 1889 (52 and 53 Vic, C. 10) and the status of the person administering the oath in the latter case being authenticated by any official specified in section 6 of the Commissioners of Oaths Act, 1889 (52 and 53 Vic. C. 10) or in any relevant Act for the said purpose.
2. If the company is incorporated in any part of the Commonwealth, the copy of the document shall be certified as a true copy by-
a. an official of the Government to whose custody the original of the document is committed; or
b. a Notary (Public) in that part of the Commonwealth; or
c. an officer of the company, on oath before a person having authority to administer an oath in that part of the Commonwealth.
(3) Any altered document delivered to the Registrar should also be duly certified in the manner mentioned above.
(4) If the Company is incorporated in a country falling outside the Commonwealth, but a party to the Hague Apostille Convention, 1961-
a. the copy of the documents shall be certified as a true copy by an official of the Government to whose custody the original is committed and be duly apostillised in accordance with Hague Convention;
b. a list of the directors and the secretary of the Company, if any, the name and address of persons resident in India, authorized to accept notice on behalf of the Company shall be duly notarized and be apostillised in the Country of their origin in accordance with Hague Convention;
c. the signatures and address on the Memorandum of Association and proof of identity, where required, of foreign nationals seeking to register a company in India shall be notarized before the notary of the country of their origin and be duly apostillised in accordance with the said Hague Convention.
Authentication of translated documents:
1. All the documents required to be filed with the Registrar by the foreign companies shall be in English language and where any such document is not in English language, there shall be attached a translation thereof in English language duly certified to be correct in the manner given in these rules.
2. Where any such translation is made outside India, it shall be authenticated by the signature and the seal, if any, of-
a. the official having custody of the original; or
b. a Notary (Public) of the country (or part of the country) where the company is incorporated:
Provided that where the company is incorporated in a country outside the Commonwealth, the signature or seal of the person so certifying shall be authenticated by a diplomatic or consular officer empowered in this behalf under section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948, or, where there is no such officer, by any of the officials mentioned in section 6, of the Commissioners of Oaths Act, 1889 (52 and 53 Vic C 10), or in any relevant Act for the said purpose.
3. Where such translation is made within India, it shall be authenticated by-
a. an advocate, attorney or pleader entitled to appear before any High Court; or
b. an affidavit, of a competent person having, in the opinion of the Registrar, an adequate knowledge of the language of the original and of English.
Documents to be annexed to prospectus:
The following documents shall be annexed to the prospectus, namely:-
a. any consent to the issue of the prospectus required from any person as an expert;
b. a copy of contracts for appointment of managing director or manager and in case of a contract not reduced into writing, a memorandum giving full particulars thereof;
c. a copy of any other material contracts, not entered in the ordinary course of business, but entered within preceding two years;
d. a copy of underwriting agreement; and
e. a copy of power of attorney, if prospectus is signed through duly authorized agent of directors.
Action for improper use or description as foreign company:
If any person or persons trade or carry on business in any manner under any name or title or description as a foreign company registered under the Act or the rules made thereunder, that person or each of those persons shall, unless duly registered as foreign company under the Act and rules made thereunder, shall be liable for investigation under section 210 of the Act and action consequent upon that investigation shall be taken against that person.