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CS Professional · CSR and Social Governance · Foreign Funding to Non-Corporate Entities

Kaveri Textiles Ltd, incorporated in India, has a wholly owned subsidiary in Singapore and an associate branch in Dubai. The company secretary asks whether FCRA, 2010 has any application to these overseas units. Which view is correct under Section 1?

The Act applies to associate branches or subsidiaries outside India of companies or bodies corporate incorporated in India. So both the Singapore subsidiary and the Dubai associate branch of Kaveri Textiles are within its application, regardless of their location abroad.

  1. AThe Act applies to associate branches or subsidiaries, outside India, of companies or bodies corporate registered or incorporated in IndiaCorrect
  2. BThe Act cannot apply to any entity located outside India
  3. CThe Act applies only to the subsidiary and not to the associate branch
  4. DThe Act applies only if the foreign units are registered as societies

Explanation

Section 1(2)(b) states that the Act applies to associate branches or subsidiaries, outside India, of companies or bodies corporate registered or incorporated in India. Both the Singapore subsidiary and the Dubai associate branch fall within this. Limiting it to subsidiaries alone ignores the express words.

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