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

Tasman Biotech Inc., a company incorporated in the United States, establishes a place of business in Pune, India. Under the Companies Act, 2013, which of the following best describes how the Act treats such a company?

Tasman Biotech Inc. is a foreign company under the Companies Act, 2013. The definition requires incorporation outside India plus a place of business in India, either by itself or through an agent. Shareholder nationality and listing status do not matter, and carrying on business in India does not make it Indian.

  1. AIt is a foreign company, because it is incorporated outside India and has a place of business in IndiaCorrect
  2. BIt is an Indian company, because it carries on business in India
  3. CIt is a foreign company only if foreign nationals hold the majority of its shares
  4. DIt is a private company by default, because it is not listed in India

Explanation

A foreign company is one incorporated outside India that has a place of business in India, whether by itself or through an agent, physically or electronically, or conducts business in India in any other manner. Tasman meets both tests. Option B is wrong since incorporation outside India makes it foreign, not Indian. Shareholder nationality is irrelevant to the definition.

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