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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Legislative Framework of Corporate Governance in India

Zenith Holdings Inc., incorporated in Nevada, ran a liaison office in Pune for several years and has now stopped carrying on business in India. The Nevada authorities have since dissolved it. Can it still be wound up under the Companies Act, 2013?

Yes. Under section 376, a foreign body corporate that carried on business in India and has ceased to do so may be wound up as an unregistered company, even if it has been dissolved or has ceased to exist under the law of its country of incorporation.

  1. ANo, because dissolution abroad ends its existence for all purposes in India
  2. BYes, it may be wound up as an unregistered company under the Part dealing with unregistered companies, despite its dissolution abroadCorrect
  3. CYes, but only if it first re-registers in its home country
  4. DNo, because winding up applies only to companies incorporated in India

Explanation

Section 376 lets a body corporate incorporated outside India that carried on business in India and has ceased to do so be wound up as an unregistered company, even though it has been dissolved or has otherwise ceased to exist under its home law. The first option wrongly treats foreign dissolution as a bar.

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