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

Aurora Corp., a foreign company, invites subscriptions for its securities from the Indian public through a prospectus issued in India. Which statement correctly states the position under the Companies Act, 2013?

A foreign company issuing a prospectus in India must comply with the Act's prospectus provisions, including stating its country of incorporation and the Indian address where its charter documents, memorandum and articles can be inspected. Being incorporated abroad gives no exemption from these disclosure requirements.

  1. AThe prospectus requires no Indian compliance as the company is incorporated abroad
  2. BThe prospectus must be issued in accordance with the Act with the prescribed disclosures, and must state the country of incorporation and the place where the charter documents can be inspectedCorrect
  3. COnly the Indian Tribunal can issue the prospectus on its behalf
  4. DThe prospectus is valid only if the company has Indian shareholders already

Explanation

The Act applies the prospectus provisions to foreign companies offering securities in India, with modifications. The prospectus must state the country of incorporation and the address in India where the charter or memorandum and articles may be inspected. Exemption and Tribunal issuance are not provided.

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