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

Silverline Corp., a foreign company with a place of business in Delhi, issues a prospectus in India inviting the public to subscribe to its securities. Which statement is correct under the Companies Act, 2013?

The prospectus provisions of the Companies Act, 2013 apply to Silverline Corp. when it offers securities to the public in India, subject to the prescribed modifications. Being incorporated abroad does not exempt it, and a copy of the prospectus must be delivered to the Registrar as required.

  1. AThe Act's prospectus provisions do not apply to a foreign company
  2. BThe prospectus must comply with the prescribed requirements, and the Act's provisions on prospectus apply to it with such adaptations as prescribedCorrect
  3. CThe prospectus needs no Registrar filing because the company is incorporated abroad
  4. DOnly the home-country regulator can regulate the prospectus

Explanation

The Act provides that the provisions relating to prospectus apply to a foreign company offering securities in India, subject to prescribed adaptations or modifications, and a copy must be filed with the Registrar. So it is not exempt because of foreign incorporation.

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