Question

3. Highlight two types of foreign companies that might be required to deliver the profit and loss account and balance sheet to the registrar of companies in your country. (10 marks)

Answer 1

As per section 381(1) of Companies Act, 2013 of India, the following has been given as follows:

(1) Every foreign company shall, in every calendar year,

(a) Make out a balance sheet and profit and loss account in such form, containing such particulars and including or having annexed or attached thereto such documents as may be prescribed; and

(b) Deliver a copy of those documents to the Registrar.

Provided that the Central Government may, by notification, direct that, in case of any foreign company or class of foreign companies, the requirements of clause (a) shall not apply, or shall apply subject to such exceptions and modifications as may be specified in the notification.

These shall apply to an Airline company which is having a share capital but subject to the exemptions as per the notification given below:

MINISTRY OF CORPORATE AFFAIRS NOTIFICATION

New Delhi, the 19th July, 2016 S.O. 2463(E).—In exercise of the powers conferred by sub- section (1) of section 381 of the Companies Act, 2013 (18 of 2013) (hereinafter referred to as “the Act”) and in supersession of the notification number G.S.R 59, dated 06.01.1959 issued under sub-section (1) of section 594 of the Companies Act, 1956 (1 of 1956), in so far as it relates to the foreign company which is an airlines company, the Central Government hereby directs that the requirement of clause (a) of sub-section (1) of section 381 of the Act shall apply to a foreign company which is an airlines company (hereinafter referred to as “the company”) having a share capital, subject to the following exceptions and modifications, namely:-

1. It shall be deemed sufficient compliance of the provisions of clause (a) of sub-section (1) of section 381 of the Act, if in respect of the period ending on or after the 31st March, 2016, a company submits to the appropriate Registrar of Companies in India,─

(i) 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.

(ii) In respect of its Indian Business operations, a statement of receipts and payments for the financial year, duly authenticated by a practicing Chartered Accountant in India or a firm or a Limited Liability Partnership of practicing Chartered Accountants in India.

(iii) The documents required to be filed with Registrar of Companies under sub-rule (2) of rule 4 of the Companies (Registration of Foreign Companies) Rules, 2014.

2. Notwithstanding anything contained in the above paragraphs, the company shall, if so required by notice in writing from the Central Government, furnish to the Central Government such information with regard to its accounts as the Central Government may require.

3. This notification shall come into force on the date of its publication in the Official Gazette.

And the second one is the foreign subsidiary companies which have been established in India as per Section 380 and 381 of Companies Act, 2013.