Dear Members
Can anyone help me out for interpretation of section 591(2) of the Companies Act 1956.
[ Notwithstanding anything contained in sub- section (1), where not less than fifty per cent. of the paid up share capital (whether equity or preference or partly equity and partly preference) of a company incorporated outside India and having an established place of business in India, is held by one or more citizens of India or by one or more bodies corporate incorporated in India, or by one or more citizens of India and one or more bodies corporate incorporated in India, whether singly or in the aggregate, such company shall comply with such of the provisions of this Act as may be prescribed with regard to the business carried on by it in India, as if it were a company incorporated in India.]
Query:
1) Do such Company need to comply with whole Companies ACt 1956 as these comapnies are treated as incorprated in India? or only provisions which are prescribed? If only with provisions prescribed then why it is said in the clause that it shall be treated as company incorporated in India? ( since all provisions of the Act are applicable to a company which is incorporated in India). Further please also give details of provisions prescribed?
2) Is it not required for such Companies to comply with other requirements of section 592 - 602
Kindly reply
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Thanks and regards
CAclubindia
