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

Zentral GmbH, a company incorporated in Germany, sets up a place of business in Pune from where it carries on business activities. It has not been incorporated in India. Under the Companies Act, 2013, how is Zentral GmbH classified?

Zentral GmbH is a foreign company because it was incorporated outside India, has a place of business in India and conducts business activity there. The Act defines such a company as foreign irrespective of the nature of its Indian presence, so the other classifications do not fit.

  1. AForeign companyCorrect
  2. BAssociate company
  3. CGovernment company
  4. DPrivate company limited by guarantee in India

Explanation

A foreign company is a company incorporated outside India which has a place of business in India, whether by itself or through an agent, physically or electronically, and conducts business activity in India. Zentral GmbH meets both conditions. The other labels apply to entities incorporated in India or defined by ownership or structure.

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