Foreign Company Under the Companies Act: Section 379

A foreign company under the Companies Act is a body corporate incorporated outside India that has a place of business here. Section 2(42) of the Companies Act, 2013 supplies the definition, and section 379 decides how much of the Act reaches it: a short list of sections for every foreign company, and the whole of Chapter XXII once Indian shareholders hold at least half the paid-up capital.

What makes a foreign company under the Companies Act?

Two limbs, printed in section 2(42) as clauses (a) and (b). Clause (a) is the presence test: a place of business in India, held by itself or through an agent, and physically or through electronic mode. Clause (b) is broader and vaguer: the body corporate "conducts any business activity in India in any other manner".

The consolidation joins the two with "and". Read strictly, that means both limbs must be met, which sits awkwardly with clause (b)'s "in any other manner", a phrase that reads like an alternative rather than an addition. This page reproduces the conjunction as printed and does not resolve it: which way it reads is a question for the text of the amending Act and the rules, not for a summary of the section.

What clause (a) does settle is that a place of business does not have to be a building. "Through electronic mode" is in the section itself. Section 386 says that "place of business" includes a share transfer or registration office, though it says so "for the purposes of the foregoing provisions of this Chapter", and section 2(42) is in Chapter I rather than in Chapter XXII. Whether that inclusion carries back to the definition is a reading rather than a settled point, and it is set out on the place of business page.

Which provisions does section 379 apply to a foreign company?

Section 379 has two sub-sections and they do different jobs.

Sub-section (1) names the provisions that reach all foreign companies: sections 380 to 386 (both inclusive) and sections 392 and 393. That sub-section was inserted by Act 1 of 2018, section 77, with effect from 9 February 2018, and a proviso that had sat under it was omitted by Act 29 of 2020, section 53, with effect from 22 January 2021.

Sub-section (2) is the escalation. Where not less than fifty per cent of the paid-up share capital, whether equity or preference or partly each, is held by one or more Indian citizens, or by one or more companies or bodies corporate incorporated in India, or by a combination of the two, singly or in the aggregate, the company must comply with the provisions of the Chapter and such other provisions of the Act as may be prescribed, in relation to the business it carries on in India, as if it were a company incorporated in India. Section 379 was renumbered as this sub-section by the same 2018 amendment.

Note what the drafting does not say. Sub-section (2) does not name a list; it applies the Chapter plus whatever else is prescribed. So the reach of the Act over a half-Indian-held foreign company is set partly by rules this page has not sourced, and should not be read off section 379 alone.

Which Chapter XXII sections sit outside the section 379(1) list?

Sections 387 to 391, and also section 393A, which was inserted by Act 29 of 2020, section 55, with effect from 22 January 2021, without section 379(1) being widened to name it. Sections 387 to 391 are the interesting case, because the reason they sit outside is visible in how they are written: each of them opens on the person rather than the company. Section 387(1) says "No person shall issue, circulate or distribute in India any prospectus offering to subscribe for securities of a company incorporated or to be incorporated outside India". A section framed that way does not need section 379 to apply it to anybody, because it binds whoever does the act in India.

That reading is this page's own, drawn from the words of the sections rather than stated by either of them. It is set out on the foreign company prospectus page, which covers sections 387 to 390 in full.

Where a foreign company shows up in the filing record

The definition matters to a filings reader because it decides whether a Registrar file exists at all. Once a body corporate incorporated outside India establishes a place of business here, section 380 puts a thirty-day clock on delivering its constitution, its directors, its Indian address and its authorised recipient of process to the Registrar, and section 381 puts an annual accounts filing behind that. Both are covered on the documents a foreign company files page and the accounts of a foreign company page.

The section 379(2) trigger is the one worth watching in an ownership context. It keys on paid-up share capital held by Indian citizens and Indian bodies corporate, aggregated. A change in who holds a foreign parent can therefore change which Indian filing obligations attach to it, without anything about its Indian operations changing at all.

Where this sits in the disclosure picture

• What a foreign company files with the Registrar covers the section 380 filing that the definition triggers.
• Which provisions apply to a foreign company covers section 384, which pulls the annual return, books of account and charge registration across.
• Place of business under the Companies Act covers the section 386 definitions, and how far they reach back into clause (a).
• Penalty for a foreign company default covers section 392, one of the two sections section 379(1) applies to every foreign company.
• The register of members covers the Indian-company register that a foreign company has no direct equivalent of.

A foreign company under the Companies Act is defined by presence in India, not by where its shares trade. Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.