Skip to content

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

Alder Pacific Ltd., a foreign company, has a place of business in Hyderabad but fails to file the required documents with the Registrar. Alder's authorised representative is a person resident in India. Which of the following is the correct legal position under the Companies Act, 2013 on liability for such default?

Both the foreign company and every officer in default, including the authorised Indian representative where applicable, are punishable with fine, and a further daily fine applies for continuing contravention. Liability is not limited to the company, and default does not trigger automatic winding up.

  1. AOnly the foreign company is liable; the officers in default and the authorised Indian representative are never liable
  2. BOnly the Indian authorised representative is liable, and the foreign company is exempt
  3. CThe foreign company and every officer in default, and the authorised Indian representative where applicable, are punishable with fine, and continuing default attracts a further daily fineCorrect
  4. DDefault results solely in automatic winding up of the foreign company

Explanation

Section 392 provides that where a foreign company contravenes the provisions of this Chapter, the company and every officer in default are punishable with fine, with a further fine for each day of continuing contravention. Liability is not confined to the company alone, nor does default cause automatic winding up. The second option wrongly exempts the company.

Did you get it right without looking?

One question tells you little. A timed set on Companies Incorporated Outside India shows your real accuracy, how long you take and where you lose marks.

Practise Companies Incorporated Outside IndiaFree diagnostic mock

More Companies Incorporated Outside India questions