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Foreign company

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Darshit Rathod

38 Points Posted on 10 July 2020

One of Italian company (Say, IT company), started its business in India by forming a company (Say, IT India company). The shares of IT India company is held by IT company.
Weather IT India company will be treated as foreign company as per sec 2(42) and for porpose of chapter xxii of companies act, 2013?

Replies (4)

Quick Summary

This discussion clarifies whether an Indian company, wholly owned by a foreign parent company, is considered a 'foreign company' under Section 2(42) of the Companies Act, 2013. While it has business operations in India and its shares are held by foreign entities, the consensus is that if it's incorporated in India following Indian law, it's an Indian company, specifically a subsidiary of a foreign company, rather than a foreign company itself.

CA Naveen Chand

Chartered Accountant

12739 Points Posted on 11 July 2020

for the foreign company , two conditions shall be checked

place of business in INDIA + having activity in INDIA (physically or electronically)

so in your case , I can say yes it is a foreign company

Malathi.S

Trichy

65 Points Posted on 12 July 2020

But it is formed and incoporated in in India by following the provisions of Indian Company Law, so it should be an Indian Company right?

Darshit Rathod

38 Points Posted on 12 July 2020

It have business activities in india physically and 100% shares are hold by two foreign company which are incorporated in foreign. Then it should be considered as foreign company in my opinion.