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Silverline Inc., a company incorporated in Singapore, has a place of business in India and its Indian operations meet the financial thresholds in section 135(1). Which statement about the applicability of section 135 to it is correct?

Section 135 applies to a foreign company as it applies to an Indian company, subject to exceptions, modifications and adaptations made by rules under the Act. This follows from section 384(2). It is neither excluded nor restricted to listed foreign companies.

  1. ASection 135 never applies to foreign companies
  2. BSection 135 applies to it as it applies to an Indian company, subject to exceptions, modifications and adaptations made by rulesCorrect
  3. CSection 135 applies only if the foreign company is listed in India
  4. DSection 135 applies only to the extent of constituting a Committee, not spending

Explanation

Section 384(2) provides that section 135 applies to a foreign company as it applies to a company incorporated in India, subject to exceptions, modifications and adaptations made by rules. Hence it is not wholly excluded, nor limited to listed companies or to Committee formation alone.

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