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CS Professional · Strategic Management and Corporate Finance · Foreign Funding - Instruments, Laws and Procedures

Nordic Textiles AB, a Swedish body corporate, carried on business in India and later ceased to do so. It was then dissolved in Sweden. Which statement is correct under the Companies Act, 2013?

It may be wound up as an unregistered company under the relevant Part of the Act. Section 376 applies once a foreign body corporate that carried on business in India ceases to do so, and this holds even if it was dissolved in its home country.

  1. AIt cannot be wound up in India because it no longer exists in Sweden
  2. BIt may be wound up as an unregistered company under the relevant Part, despite its dissolution under Swedish lawCorrect
  3. CIt can be wound up only if the Swedish court consents
  4. DIt can be wound up only if it still holds a place of business in India

Explanation

Section 376 permits a body corporate incorporated outside India that has been carrying on business in India and has ceased to do so to be wound up as an unregistered company, even though it has been dissolved or has ceased to exist under the laws of its home country. Home-country dissolution is therefore no bar.

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