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

Zephyr Aero Inc., a company incorporated in Delaware, USA, sets up a liaison office in Pune and starts a place of business there from where it regularly solicits orders. Under the Companies Act, 2013, how is such a company classified for the purposes of Chapter XXII?

Zephyr Aero Inc. is a foreign company. The Companies Act treats a company incorporated outside India that has a place of business in India and conducts business activity there as a foreign company, so the Pune place of business from which it solicits orders brings it within Chapter XXII.

  1. AForeign companyCorrect
  2. BPrivate company limited by guarantee
  3. CGovernment company
  4. DHolding company of an Indian company

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 in any other manner. Zephyr satisfies both elements. It is not a Government company, since no Indian Government shareholding is involved, and nothing shows it holds shares in an Indian company.

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