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

Kestrel Logistics Inc., a foreign company, closes its place of business in India. Which statement correctly describes the legal position under the Companies Act, 2013 as to service of documents and liability?

A foreign company ceasing its Indian place of business must notify the Registrar, and liabilities it incurred in India remain enforceable. Closing the office does not wipe out obligations, and nothing passes automatically to the Registrar.

  1. AOnce it ceases business, it is immediately free of all Indian liabilities
  2. BIt must give notice of the cessation to the Registrar, and liabilities incurred in India continue to be enforceable until it is dischargedCorrect
  3. CIt need not inform the Registrar, since the place of business is closed
  4. DIts Indian liabilities pass automatically to the Registrar

Explanation

A foreign company that ceases to have a place of business in India must give notice to the Registrar, and it remains subject to Indian liabilities incurred earlier; closing the office does not extinguish them. Liabilities do not pass to the Registrar.

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