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

Meridian Pharma Inc., a foreign company registered in India, issues a prospectus inviting the Indian public to subscribe to its securities. Which statement is correct under the Companies Act, 2013?

The prospectus of a foreign company inviting the Indian public to subscribe must comply with the Companies Act prospectus provisions, with the prescribed adaptations, and be filed with the Registrar. Foreign incorporation or foreign regulator approval does not exempt it from the requirement.

  1. AThe prospectus must comply with the provisions of the Act relating to prospectuses, as modified for foreign companies, and a copy must be filed with the RegistrarCorrect
  2. BNo prospectus is needed because the company is incorporated abroad
  3. CThe prospectus need not be filed with the Registrar if approved by the foreign regulator
  4. DOnly SEBI may approve it and the Companies Act does not apply

Explanation

The Act applies the prospectus provisions to a foreign company offering securities in India, subject to prescribed modifications. A copy is to be registered with the Registrar. Foreign regulator approval does not dispense with this, and the Companies Act is not displaced by SEBI's separate role.

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