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CS Professional · Strategic Management and Corporate Finance · Foreign Funding - Instruments, Laws and Procedures

A foreign body corporate that carried on business in India has ceased to do so and has been dissolved in its home country. Under the Companies Act, 2013 text given, what is the position on winding up?

It may be wound up in India as an unregistered company. Section 376 allows this even though the body corporate has been dissolved or ceased to exist under its home country's laws, once it has stopped carrying on business in India.

  1. AIt cannot be wound up in India because it no longer exists
  2. BIt may be wound up as an unregistered company despite being dissolved in its home countryCorrect
  3. CIt can be wound up only by a court of its home country
  4. DIt is automatically struck off the Indian register without any winding up

Explanation

Section 376 says a body corporate incorporated outside India that has been carrying on business in India and ceases to do so may be wound up as an unregistered company, notwithstanding that it has been dissolved or has otherwise ceased to exist under the laws of its home country. Hence the home-country dissolution does not bar Indian winding up.

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