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

Zentrix Robotics Inc., a company incorporated in Germany, sets up a place of business in Pune and carries on business there. Under the Companies Act, 2013, how is it classified?

Zentrix is a foreign company. The Companies Act defines a foreign company as one incorporated outside India that has a place of business in India, itself or through an agent, and conducts business activity there. Operating from Pune does not make it an Indian company.

  1. AA foreign company, because it is incorporated outside India and has a place of business in IndiaCorrect
  2. BAn Indian private company, because it operates in Pune
  3. CA subsidiary company of an Indian company by virtue of its Indian operations
  4. DAn unregistered company that must be wound up 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, and conducts business activity in India. Zentrix meets both conditions. Treating it as an Indian company is wrong because incorporation outside India decides nationality.

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