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

Zephyr Holdings Inc., incorporated in Delaware, USA, sets up a liaison office in Pune and starts doing business in India through it, with a place of business at Pune. Under Chapter XXI of the Companies Act, 2013, how is Zephyr Holdings classified?

Zephyr Holdings is a foreign company. It was incorporated outside India in Delaware and has a place of business in Pune, where it conducts business activity. Those two features together meet the Companies Act definition of a foreign company, so the Chapter XXI provisions apply to it.

  1. AForeign companyCorrect
  2. BPrivate company incorporated in India
  3. CGovernment company
  4. DAssociate company of an Indian company

Explanation

A foreign company is a company or body corporate 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 limbs. It is not incorporated in India, so it cannot be an Indian private company.

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