Section 591 o the Companies Act, 1956 provides that a foreign company is a company which is incorporated in a country outside India under the law of that other country and has established a place of business in India.

“Having a place of business in India” connotes that the business activity being carried at a fixed and definite place in India on a continuous basis.  It should not be merely a liaison office.

Types of Foreign Companies

Foreign Companies are of two classes namely:-

1. Companies which are  incorporated outside India,and  have established a place of business in India on and after April 1, 1956 and

2. Companies which are incorporated outside India, and have established a place of business in India before April 1, 1956.

Documents to be filed with the Registrar of Companies

Section 592 of the Companies Act, 1956 provides that every foreign company which has established a place of business in India on and after April 1, 1956 must, within 30 days of the establishment of such place of business, file the following particulars in Form No 44 with the Registrar of Companies at New Delhi and also with the Registrar of Companies of the Sate in which such place of business is situated:-

1. a certified copy of memorandum and articles of the company and if the instrument is not in English language, a certified translation in English hereof;

2. the full address of the registered office of the company

3. a list of the directors of the company and its secretary with full particulars of their names, nationality, their addresses and business occupations;

4. the names and  addresses of one or more persons resident in India who are authorized to accept any notices or other documents; and

5. the full address of the principal place of business in India

Filling of Accounts of Foreign Company with the ROC

Section 594 provides that every foreign company, in every calendar year, file with the Registrar of Companies, the following documents within a period of 9 months from the close of the financial year;

• Annual Accounts which are required to be submitted by it o the prescribed authority in the country of its incorporation (these are called World Accounts);

• Annual Accounts in respect of its Indian business; and

• A list of all places of business established in India.

Certain provisions of companies Act to apply on Foreign Companies

Section 603 of the Companies Act, 1956 provides that if a company incorporated outside India, whether or not it has established a place of business in India. Intends to issue shares or debentures in India, it shall issue a prospectus.  The prospectus shall be dated.  The prospectus must be registered with the Registrar of Companies before it is issued.

Following are the important contents of prospectus:

1. The instrument defining the constitution of the company.

2. The enactment under which the company was incorporated.

3. If the instrument defining he constitution o enactment under which the company is not in English, then a certified translation thereof.

4. An address in India where inspection of above documents can be made.

5. The date and country of incorporation.

6. The address of its principal office in India, if any.

7. The prospectus shall contain such matters as are specified in Schedule II.

The provisions contained in (a) to (d) above shall not apply if the prospectus is issued more than 2 years after the company had become entitled to commence business.