Which Provisions Apply to a Foreign Company: s. 384

Section 384 decides which Indian-company provisions apply to a foreign company. It is a bridging section: five sub-sections, each reaching across to a different part of the Companies Act, 2013 and pulling it over to a body corporate incorporated outside India. Debentures, the annual return, corporate social responsibility, books of account, charges and inspection all arrive through it.

Which Companies Act provisions apply to a foreign company?

Five, and the drafting of each sub-section tells you how much of the original comes across.

Three different formulas appear in that table and they are not interchangeable. Mutatis mutandis in (1), (4) and (5) carries the provision across with the changes its new subject requires. Subject to rules in (2) leaves the tailoring to a rule-maker. To the extent of in (3) is a narrowing, and it is the only sub-section that states its own limit.

What does section 384(3) actually require?

Less than section 128 does for an Indian company, and the section says so. Sub-section (3) applies section 128 to the extent of requiring the foreign company to keep, at its principal place of business in India, the books of account referred to in that section, and then names what they must cover:

1. monies received and spent,
2. sales and purchases made, and
3. assets and liabilities,

in each case in the course of or in relation to its business in India.

Two limits are written into that. The place is fixed as the Indian principal place of business, which is the address filed under section 380(1)(e). The scope is fixed as the Indian business, not the company's worldwide affairs. The Indian-company version of the duty is covered on the books of account page.

How far do the charge and inspection chapters reach?

Sub-section (4) applies Chapter VI mutatis mutandis to charges on properties created or acquired by any foreign company. Chapter VI is the registration-of-charges regime, so a charge over property a foreign company creates or acquires becomes a registrable, and therefore searchable, event. The Indian-company entry point is covered on the registration of charges page, and the search route on how to check a company's registered charges.

Sub-section (5) applies Chapter XIV mutatis mutandis to the Indian business of a foreign company as they apply to a company incorporated in India. As with sub-section (3), the subject is the Indian business rather than the company at large.

Why section 384 is the sub-section that matters to a filings reader

Because it is where a foreign company stops being a thin Registrar file and starts producing the same kinds of records an Indian company does. Section 380 gives identity and address. Section 381 gives annual accounts. Section 384 adds the annual return under section 92, which is a different document from the accounts and carries shareholding and governance particulars, and it adds charge registrations, which are dated, third-party-visible events.

The 2018 insertion of section 135 into sub-section (2) is the one amendment on this section worth recording precisely. The consolidation prints the footnote to sub-section (2) as "Ins. by Act 1 of 2018, s. 78 (w.e.f. 9-2-2018)", and the words inserted are "and section 135". Corporate social responsibility is covered on the section 135 page, and the annual return on the section 92 page.

Where this sits in the disclosure picture

• Foreign company under the Companies Act covers who section 384 applies to.
• Documents a foreign company files with the Registrar covers the section 380(1)(e) address that section 384(3) fixes the books to.
• Accounts of a foreign company covers the section 381 annual delivery that sits alongside the section 92 return.
• What is in the annual return under section 92 covers the return section 384(2) carries across.
• Registration of charges under section 77 covers the Chapter VI regime that section 384(4) applies.

Which provisions apply to a foreign company is answered by section 384, and the answer depends on which of its three formulas the sub-section uses. 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.