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

Marlowe Industries plc, a foreign company, has a place of business in Mumbai. It wishes to issue a prospectus inviting the Indian public to subscribe for its securities. Which statement reflects the correct position under the Companies Act, 2013?

Marlowe must issue a dated prospectus that complies with the Act's prospectus provisions, as modified by the rules, and deliver a copy to the Registrar before issue. The Act does regulate foreign company offers, and neither home regulator approval nor Indian re-incorporation is required.

  1. AIt may issue the prospectus freely, because the Act does not regulate foreign companies' offers
  2. BThe prospectus must be dated, and a copy must be delivered to the Registrar before issue, and it must comply with the provisions applicable to prospectuses of Indian companies, subject to prescribed modificationsCorrect
  3. CIt may issue the prospectus only after becoming a company incorporated in India
  4. DThe prospectus need only be approved by the foreign regulator of its home country

Explanation

Chapter XXII requires a foreign company's prospectus to comply with the prospectus provisions of the Act, as modified by prescribed rules, and it must be delivered to the Registrar before issue. Indian-law liability for misstatement also applies. The prospectus provisions are not left to the home regulator, and re-incorporation in India is not required.

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