Companies (Registration of Foreign Companies) Rules, 2014 prescribes guidelines to be followed for the registration of a foreign company. The particulars relating to the directors and the Secretary to be furnished to the Registrar by the foreign companies:
Every foreign company will, within thirty days of the establishment of its place of business in India, in addition to the particulars specified in the subsection (1) of section 380 of the Act (i.e., Companies Act, 2013), also deliver to the Registrar for the registration, a list of directors and Secretary of such company.
The list of directors and secretary or the equivalent (by whatever name called) of the foreign company must contain the prescribed particulars, for each of the persons who are included in such a list.
A foreign company must, within a period of thirty days of establishment of its place of business in India, file with the registrar Form FC-1 with such fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 and with the documents that are required to be delivered for the registration by a foreign company in accordance with the provisions of the sub-section (1) of section 380 and the application must also be supported with an attested copy of the approval from the Reserve Bank of India under the Foreign Exchange Management Act or the Regulations, and also from other regulators, if any, the approval is needed by such foreign company to establish a place of business in India or a declaration from the authorized representative of such foreign company that no such approval is needed.
If any alteration is made or occurs in the document delivered to the Registrar for the registration under the sub-section (1) of section 380, the foreign company must file with the Registrar, a return in the Form FC2 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 containing all the particulars of the alteration, within a period of thirty days from the date on which the alteration was made or occurred.
Financial Statement of foreign company
Every foreign company will prepare a financial statement of its Indian business operations in accordance with the Schedule III or as near thereto as may be possible for each financial year including:
a. The documents required to be annexed thereto in accordance with the provisions of the Chapter IX of the Act i.e. Accounts of Companies
b. The documents relating to the copies of the latest consolidated financial statements of the parent foreign company, as submitted by it to the prescribed authority in the country of its incorporation under provisions of the law for the time being in force in that country:
Provided that where such documents are not in the English language, there must be annexed to it a certified translation thereof in the English language:
Such other documents as may be required to be annexed or attached in accordance with sub-rule (2).
Every foreign company must, along with the financial statement needed to be filed with the Registrar, attach thereto the following documents; namely:-
A statement of the related party transaction, which shall include-
The name of the person in India who shall be deemed to be the related party within the meaning of clause (76) of section 2 of the Act of the foreign company or of any subsidiary or holding company of such a foreign company or of any firm in which such a foreign company or its subsidiary or holding company is a partner;
The nature of such relationship;
The description and nature of the transaction;
The amount of such a transaction during the year with opening, closing, highest and lowest balance during the year and the provisions made (if any) in respect of such transactions;
The reason of such a transaction;
The material effect of such a transaction on both the parties;
The amount written off or written back in respect of dues from or to the related parties;
A declaration that such transactions were carried out at an arms’ length basis; and
Any other details of the transaction necessary to understand the financial impact;
The statement of repatriation of profits which shall include-
The amount of profits repatriated during the year;
The recipients of the repatriation;
A form of repatriation;
The dates of repatriation;
The details if repatriation made to a jurisdiction other than the residence of the beneficiary;
The mode of repatriation; and
The approval of the Reserve Bank of India or any other authority, if any.
The statement of transfer of funds (including the dividends if any) which must , in relation of any fund transfer between the place of business of the foreign company in India and any other related party of the foreign company outside India including its holding, subsidiary and associate company, include-
The date of such a transfer;
The amount of fund transferred or received;
The mode of receipt or transfer of fund;
The purpose of such receipt or transfer; and
The approval of Reserve Bank of India or any other authority, if any.
The documents referred to in this rule must be delivered to the Registrar within a period of six months of the close of the financial year of the foreign company to which the documents relate.
Provided that the Registrar shall, for any special reason, and on application made in writing by the foreign company concerned, extend the said period by a period not exceeding three months.
Audit of accounts of foreign company:
Every foreign company must get its accounts, pertaining to the Indian business operations prepared in agreement with the requirements of clause (a) of sub-section (1) of section 381 and rule 4, then audited by a practicing Chartered Accountant in India or a firm or limited liability partnership of a practicing chartered accountants.
The provisions of the Chapter X i.e. Audit and Auditors and the rules made there under, as far as applicable, will apply, mutatis mutandis, to the foreign company.
List of places of business of foreign company:
Every foreign company must file with the Registrar, along with the financial statement, in Form FC.3 with such fee as provided under the Companies (Registration Offices and Fees) Rules, 2014 a list of all the places of business that has been established by the foreign company in India as on the date of balance sheet.
Every foreign company will prepare and file, within a period of sixty days from the last day of its financial year, to the Registrar an annual return in Form FC.4 along with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 containing the particulars as they stood on the close of financial year.
The office where documents to be delivered and fee for registration of documents:
Any document which any foreign company is needed to deliver to the Registrar must be delivered to the Registrar having the jurisdiction over New Delhi, and the references to the Registrar in the Chapter XXII of the Act i.e. The Companies Incorporated outside India and these rules will be construed accordingly.
The fee to be paid to Registrar for the registering of any document relating to a foreign company will be such as provided in the Companies (Registration Offices and Fees) Rules, 2014.
If a foreign company ceases to have a place of business in India, it must forthwith give a notice of the fact to the Registrar, and as from the date on which the notice is so given, the obligation of the company to deliver any document to the Registrar will cease, provided it has no other place of business in India.
A copy of any statutes, charter, memorandum and articles, or other instrument constituting or defining the constitution of a foreign company will be duly certified to be a true copy in the manner given below:
If the company is incorporated in a country outside the Commonwealth-
The copy above-mentioned will be certified as a true copy by-
An official of the Government to whose custody the original is situated; or
A Notary (Public) of such a Country; or
An officer of the company.
The signature or the seal of the official referred to in sub-clause (i) of clause (a) or the certificate of the Notary (Public) referred to in sub-clause (ii) of clause (a) will be authenticated by a diplomatic or a consular officer empowered in this behalf under section 3 of the Diplomatic and Consular Officers (Oaths and fees) Act, 1948 (XL of 1948), or where there is no such officer, by any of the officials mentioned in section 6 of the Commissioners of Oath Act, 1889 (52 and 53 Vic. C. 10), or in any relevant Act for the said purpose.
The certificate of the officer of company referred to in sub-clause (iii) of clause (a) will be signed before a person having an authority to administer an oath as provided under section 3 of the Diplomatic and Consular Officers (Oath and Fees) Act, 1948 (XL of 1948), or as the case may be, by section 3 of Commissioners of Oath Act, 1889 (52 and 53 Vic, C. 10) and status of the person who is administering the oath in the latter case being authenticated by any official specified in section 6 of the Commissioners of Oaths Act, 1889 (52 and 53 Vic. C. 10) or in any relevant Act for the said purpose.
If the company is incorporated in any part of the Commonwealth, the copy of the document will be certified as a true copy by-
An official of the Government to whose the custody the original of the document is committed; or
A Notary (Public) in that part of the Commonwealth; or
An officer of the company, on oath before a person having an authority to administer an oath in that part of the Commonwealth.
Any altered document delivered to the Registrar must also be duly certified in the manner mentioned above.
If the Company is incorporated in a country which is falling outside the Commonwealth, but a party to the Hague Apostille Convention, 1961-
The copy of the documents must be certified as a true copy by an official of the Government to whose custody the original is committed and be duly apostilled in accordance with Hague Convention;
A list of directors and secretary of the Company, if any, the name and address of the persons resident in India, authorized to accept the notice on behalf of the Company must be duly notarized and be apostilled in the Country of their origin in accordance with Hague Convention;
The signatures and the address on the Memorandum of Association and proof of identity, where it is required, of foreign nationals seeking to register a company in India must be notarized before the notary of the country of their origin and be duly apostilled in accordance with the said Hague Convention.
Authentication of translated documents:
All the documents needed to be filed with the Registrar by the foreign companies must be in English language and where any such document is not in English language, there should be attached a translation thereof in English language duly certified to be correct in the manner given in these rules.
Where any such translation is made outside India, it should be authenticated by the signature and the seal, if any, of-
The official having a custody of the original; or
A Notary (Public) of the country (or part of the country) where the company is incorporated:
Provided that where the company is incorporated in a country outside the Commonwealth, the signature or the seal of the person so certifying must be authenticated by a diplomatic or a consular officer empowered in this behalf under section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948, or, where there is no such officer, by any of the officials mentioned in section 6, of the Commissioners of Oaths Act, 1889 (52 and 53 Vic C 10), or in any relevant Act for the said purpose.
Where such a translation is made within India, it must be authenticated by-
An advocate, an attorney or a pleader entitled to appear before any High Court; or
An affidavit, of a competent person having, in the opinion of the Registrar, an adequate knowledge of the language of the original and of English.
Documents to be annexed to prospectus:
The following documents must be annexed to the prospectus, namely:-
Any consent to the issue of the prospectus needed from any person as an expert;
A copy of the contracts for an appointment of the managing director or the manager and in case of a contract not reduced into writing, a memorandum giving full particulars thereof;
A copy of any other material contracts, not entered in the ordinary course of business, but entered within the preceding two years;
A copy of underwriting agreement; and
A copy of the power of attorney, if prospectus is signed through duly authorized agent of directors.
Action for improper use or description as foreign company
If any individual or individuals trade or carry on business in any manner under any name or title or description as a foreign company registered under the Act or the rules made thereunder, that individual or each of those individuals shall, unless duly registered as a foreign company under the Act and rules made thereunder, will be liable for an investigation under section 210 of the Act and an action consequent upon that investigation will be taken against that person.