Skip to content

CS Executive · Setting Up of Business, Industrial and Labour Laws · Corporate Entities - Companies

Zephyr Holdings Inc., incorporated in Delaware, ran a sales office in Pune for several years and then stopped carrying on business in India. The Delaware entity was later dissolved under US law. Under the Companies Act, 2013, what is the position regarding winding up in India?

A foreign body corporate that carried on business in India and then ceased may be wound up in India as an unregistered company, even though it has been dissolved or has ceased to exist under the law of its home country. Dissolution abroad is no bar.

  1. AIt cannot be wound up in India because it has ceased to exist under the law of its country of incorporation
  2. BIt may be wound up in India as an unregistered company despite its dissolution abroadCorrect
  3. CIt may be wound up only after it is revived in Delaware
  4. DIt can be wound up only as a registered company after it files a fresh incorporation application in India

Explanation

Section 376 lets a body corporate incorporated outside India that has been carrying on business in India and ceases to do so be wound up as an unregistered company under the relevant Part. This holds even if the body corporate has been dissolved or has otherwise ceased to exist under its home law. So dissolution abroad does not bar winding up in India.

Did you get it right without looking?

One question tells you little. A timed set on Corporate Entities - Companies shows your real accuracy, how long you take and where you lose marks.

Practise Corporate Entities - CompaniesFree diagnostic mock

More Corporate Entities - Companies questions