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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Business Ethics, Code of Conduct and Anti-Bribery

Nordica GmbH is incorporated in Germany and runs a showroom in Pune as part of its business. Is it a 'commercial organisation' for the purposes of section 9 of the Prevention of Corruption Act, 1988?

Yes. The Act defines a commercial organisation to include a body incorporated outside India that carries on a business, or part of a business, anywhere in India. Nordica's Pune showroom is part of its business, so it is covered, and no Indian subsidiary is needed.

  1. ANo, because only bodies incorporated in India are covered
  2. BNo, because showroom activity is not 'business' unless it involves manufacturing
  3. CYes, because a body incorporated outside India that carries on a business, or part of a business, in any part of India is coveredCorrect
  4. DYes, but only if it has a wholly owned Indian subsidiary

Explanation

The definition includes any body incorporated outside India which carries on a business, or part of a business, in any part of India. Operating a showroom in Pune is part of a business. The 'India-only' option ignores clause (ii), and a subsidiary is not required.

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