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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Legislative Framework of Corporate Governance in India

Karlsen GmbH, a German body corporate, once ran an office in Chennai and has stopped business in India. A creditor asks whether the Indian winding-up provisions can reach it. Which statement is correct?

It can be wound up as an unregistered company. Section 376 covers a body corporate incorporated outside India that has carried on business in India and ceased to do so, so the foreign incorporation does not place it beyond the winding-up Part.

  1. AIt can be wound up as an unregistered company under the Part, because it carried on business in India and has ceased to do soCorrect
  2. BIt can be wound up only as a registered company under the Act
  3. CIt cannot be wound up because a company incorporated outside India is outside the Act's winding-up Part
  4. DIt can be wound up only after being registered again with the Registrar in India

Explanation

Section 376 treats a foreign body corporate that carried on business in India and ceased to do so as an unregistered company for winding up. It is not treated as a registered company, and no fresh registration is required. Hence the first option is correct.

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