In the age of globalization, foreign companies venturing into India encounter the comprehensive regulatory framework of the Companies Act 2013 (the “Act”), governing their operations, management, and compliance obligations. Navigating this landscape is vital to ensure legal adherence, transparency, and market presence. The Act mandates foreign companies to meet diverse compliance requirements, spanning registration, operations, and reporting, aimed at safeguarding stakeholders, ensuring fairness, and upholding corporate governance. This article offers a tailored “Compliances Checklist,” guiding foreign companies to establish, sustain, and prosper in India while conforming to legal standards. By addressing these obligations, businesses can mitigate risks, foster growth, and align with the country’s business environment.
Definition of Foreign Company: – As per section 2(42) of the Act, a foreign company is any company or body corporate incorporated outside India which, —
(a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and
(b) conducts any business activity in India in any other manner.
Governing Chapter and Sections of the Act: – Chapter XXII of the Act, Section 379 to 393.
Applicable Rules: – The Companies (Registration of Foreign Companies Rules) 2014 (“Rules”).
Outlined below is the compliance checklist for foreign companies under the Act –
| Sr. No | Activity | e-Form Required | Documents/Information required | Timeline |
|---|---|---|---|---|
| Establishment of place of business in India Ref: – Section 380 of the Act read with (i) Rule 3 of The Companies (Registration of Foreign Companies Rules) 2014 and (ii) Instruction Kit for filing Form no. FC-1. | FC-1 | Certified copy of the chartered documents and/or other instrument constituting or defining the constitution of the company and, if the instrument is not in the English language, a certified translation thereof in the English language.Full address of the registered or principal office of the company.List of directors and secretary of the company.Name and address or the names and addresses of one or more persons resident in India authorised to accept on behalf of the company service of process and any notices or other documents required to be served on the company.Full address of the office of the company in India which is deemed to be its principal place of business in India.Power of attorney or board resolution in favour of the authorised representative(s)Particulars of opening and closing of a place of business in India on earlier occasion or occasions.Declaration that none of the directors of the company or the authorised representative in India has ever been convicted or debarred from the formation of companies and management in India or abroad.Translated version of the documents in English (in case the documents attached are not in English). | Within 30 days of establishment of place of business in India. | |
| Alteration of Charter Documents, change in the registered office of the company in the country of incorporation, change in address in India, Change in Directors, secretary, authorised representative, Intimation of New place of business in India, closure of place of business in India Ref: – Section 380 of the Act read with (i) Rule 3 of the Companies (Registration of Foreign Companies Rules) 2014 and (ii) Instruction Kit for filing Form no. FC-2. | FC-2 | Certified true copy of the Board resolution approving such change.Copy of the general meeting resolution approving such change.Copy of approval letter if any approval is required for such alteration.Translated version of the documents in English (in case documents attached are not in English). | Within 30 days of such change/alterationbeing made | |
| Filing of Financial Statements Ref: – Section 381 of the Act read with (i) Rules 4,5 and 6 of the Companies (Registration of Foreign Companies Rules) 2014 and (ii)Instruction Kit for filing Form no. FC-3. | FC-3 | Copy of the latest consolidated financial statement of the parent company.Copy of balance sheet and profit and loss account duly authenticated under section 381(1).Statement of related party transactions.Statement of repatriation of profits.Statement of transfer of funds between the place of business of a foreign company in India and any other related party of the foreign company outside India including its holding, subsidiary and associate company;Copy of Approval letter of extension of validity period if applicable;Approval of Reserve Bank of India or any other authority as may be required;Details of other entity(s) through CSR Activities have been undertaken if applicable.Translated version of the documents in English (in case the documents attached are not in English). | Within 6 months of the close of the financial year of the foreign company to which the financial statements relate. | |
| Annual Return Ref: – Rule 7 of The Companies (Registration of Foreign Companies Rules) 2014 read along with Instruction Kit for Form no. FC-4. | FC-4 | Details of Promoters, Directors and Key managerial personnel and changes therein since the close of the previous financial year;Details of directors and key managerial personnel and their remuneration;Details of the meeting of the members or class thereof, board and its various committees along with attendance details;Particulars of members and debenture holders along with changes therein since the close of the previous financial year. | Within 60 days from the last day of its financial year | |
| Appointment of Auditor for audit of accounts pertaining to the Indian business operations Ref: – Section 139 and 381 of the Act read with Rule 4 and 5 of The Companies (Registration of Foreign Companies Rules) 2014. | ADT-1 | Certified copy of the resolution for the appointment of an auditor;Consent and eligibility certificate from proposed auditor. | Within 15 days of the appointment of the auditor |
– Surendra Rahalkar,
Associate, Solomon & Co.
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