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CS Executive · Setting Up of Business, Industrial and Labour Laws · Corporate Entities - Companies

Nile Trading PLC, a foreign company with a branch in Chennai, must prepare its annual financial statements. Which statement is correct under Section 381?

Every foreign company must, in every calendar year, prepare a balance sheet and profit and loss account in the prescribed form and deliver a copy to the Registrar, along with a list of its Indian places of business. Filing does not depend on profit, and exemption needs a Central Government notification.

  1. AIt must make out a balance sheet and profit and loss account every calendar year and deliver a copy to the RegistrarCorrect
  2. BIt need file accounts only if it makes a profit in India
  3. CIt must file accounts only once at the time of setting up the place of business
  4. DIt need not file accounts under any circumstances

Explanation

Section 381(1) requires every foreign company, in every calendar year, to make out a balance sheet and profit and loss account and deliver a copy to the Registrar, with a list of its places of business in India. The Central Government may exempt classes by notification, but there is no profit condition.

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