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

Brindle Machines Inc., a foreign company with a place of business in Gujarat, prepares its balance sheet and profit and loss account every year as required of foreign companies. Which statement is correct about its obligations?

A foreign company must prepare its financial statements each year in the form required of Indian companies, with prescribed modifications, and deliver copies to the Registrar. Being incorporated abroad gives no exemption, and there is no turnover comparison condition for this duty.

  1. AIt must prepare financial statements in the form required for companies under the Act and deliver copies to the Registrar, as if it were a company incorporated in India, subject to such modifications as may be prescribedCorrect
  2. BIt need not file any financial statements with the Registrar in India since it is incorporated abroad
  3. CIt must file only an audited statement of its Indian profits with the Income-tax department, and nothing with the Registrar
  4. DIt must file financial statements only if its Indian turnover exceeds its foreign turnover

Explanation

Every foreign company must make out each calendar year a balance sheet and profit and loss account, and such documents as are required of a company incorporated in India, and deliver copies to the Registrar. The Act applies this in the manner and with modifications as prescribed. Exemption because of foreign incorporation or a turnover comparison is not provided.

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