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

Nordic Textiles AB, a Swedish company, carried on business in Surat and stopped trading there. Creditors in India want to wind it up. Which statement best reflects the Companies Act, 2013?

Nordic Textiles can be wound up in India as an unregistered company because it carried on business in India and then ceased. Its continued legal existence in Sweden is not required, and the Act does not exclude foreign companies from winding up.

  1. AWinding up is possible only if the company is still in existence in Sweden
  2. BWinding up is possible only if the Registrar of Companies in India approves the dissolution
  3. CWinding up as an unregistered company is available because it carried on business in India and then ceasedCorrect
  4. DWinding up is barred because foreign companies are outside the Act's winding up provisions entirely

Explanation

Section 376 applies to a body corporate incorporated outside India that has been carrying on business in India and ceases to do so. Such a body may be wound up as an unregistered company. Its continued existence in the home country is not a condition, so the first option is wrong.

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