Section 2(9) of the Companies Act, 1956 defines the expression "Branch office" and accordingly, "Branch Office" in relation to a company means— (a) any establishment described as a branch by the company; or (b) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the company; or (c) any establishment engaged in any production, processing or manufacture, but does not include any establishment specified in any order made by the Central Government under section 8. Vide Circular F. No. 8/16(1)/61-PR, the term "branch office" includes any establishment engaged in any production, processing or manufacture. Branch Office of a company registered under the Companies Act, 1956 may be located in India or elsewhere.
13 December 2012
Power of the Central Government to declare an establishment not to be a branch office :
The Central Government may, by order, declare that in the case of any company, any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the company, or any establishment engaged in any production, processing or manufacture, shall not be treated as a branch office of the company for all or any of the purposes of the Companies Act, 1956. [Section 8]
Appointment of auditor for branch office in India:
Where a company has a branch office, the accounts of that office shall be audited by the company's auditor appointed under section 224 or by a person qualified for appointment as auditor of the company under section 226.
Appointment of auditor of branch office situated outside India:
In case a company has a branch office and branch office is situated outside India, the accounts of such office shall be audited by any of the following persons:— (a) company's auditor, or (b) a person qualified for appointment as auditor of the company under section 226, or (c) an accountant duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of the country.
Right of company's auditor in relation to branch audit:
Where the accounts of any branch office are audited by a person other than the company's auditor, the company's auditor— (a) shall be entitled to visit the branch office, if he deems it necessary to do so for the performance of his duties as auditor; and (b) shall have a right of access at all times to the books and accounts and vouchers of the company maintained at the branch office.
13 December 2012
Members in general meeting may appoint separate branch auditor:
Where a company in general meeting decides to have the accounts of a branch office audited otherwise than by the company's auditor, the company in that meeting shall for the audit of those accounts appoint a person qualified for appointment as auditor of the company under section 226, or where the branch office is situated in a country outside India, a person who is either qualified as aforesaid or an accountant duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of that country, or authorise the Board of directors to appoint such a person in consultation with the company's auditor. [Section 228(3)(a)]
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