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

Kestrel Corp., a foreign company with a place of business in Chennai, ceases to have a place of business in India. It intends to be free of the filing obligations. Which statement reflects the correct legal position?

Kestrel must give notice of the cessation to the Registrar, and until it does so it is deemed to still have a place of business in India, so its filing obligations continue. Merely closing operations or a bank account does not end them.

  1. AObligations end automatically on the day it ceases to have a place of business
  2. BIt must give notice to the Registrar of the cessation, and obligations continue until the notice is givenCorrect
  3. CObligations end only after the Central Government passes a winding-up order
  4. DIt may stop filing once its Indian bank account is closed

Explanation

If a foreign company ceases to have a place of business in India, it must give notice to the Registrar. Until that notice is given, it is treated as continuing to have a place of business, so its filing obligations remain. Automatic cessation or bank account closure does not release it.

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