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CA Intermediate · Corporate and Other Laws · Companies Incorporated Outside India

Aarav Pharma Ltd., a foreign company with an Indian place of business, wants to issue a prospectus inviting the Indian public to subscribe to its securities. Which statement reflects the correct legal position?

The prospectus provisions of the Companies Act, 2013 apply to a foreign company inviting the Indian public to subscribe to securities, subject to prescribed modifications. It must therefore comply with the Act's prospectus requirements and rules, including filing with the Registrar, besides other applicable laws.

  1. AThe provisions on prospectus in the Companies Act, 2013 apply to it with the modifications prescribed, and it must comply with the Act's prospectus requirements and rules, including filing with the RegistrarCorrect
  2. BIt can issue any offer document without any compliance since it is incorporated abroad
  3. CIt is barred from issuing any prospectus in India under all circumstances
  4. DOnly SEBI rules apply and the Companies Act is not relevant at all

Explanation

The Act provides that the prospectus provisions apply to a foreign company offering securities in India, subject to modifications prescribed by rules. So the company must comply and file the prospectus with the Registrar. The claim of total exemption is wrong, as is a blanket bar.

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