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

Kobe Precision Ltd., a Japanese company, has a place of business in Gujarat. It issues an offer document inviting the public in India to subscribe for its securities. Which statement states the correct position under the Companies Act, 2013?

The Companies Act's prospectus provisions apply to Kobe Precision with prescribed modifications. Its prospectus must be dated, delivered to the Registrar for registration before issue, and contain the prescribed particulars. Being foreign or issuing in rupees gives no exemption, and SEBI rules apply in addition to the Act.

  1. AThe Act's prospectus provisions do not apply because the company is foreign
  2. BThe prospectus must be dated, filed with the Registrar before issue, and contain prescribed matters; the provisions apply to it with the specified modificationsCorrect
  3. COnly SEBI rules apply, and the Companies Act has no role
  4. DThe prospectus need not be registered if the issue is only in rupees

Explanation

The Act extends the prospectus provisions to foreign companies offering securities in India, subject to prescribed modifications and adaptations. The prospectus must be dated and delivered to the Registrar for registration before issue, with certain specified particulars. Claiming exemption because the company is foreign or because the issue is in rupees is wrong. SEBI rules apply additionally, not exclusively.

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