Global e-tailers selling in India may get registered under Companies Act

If the Ministry of Corporate Affairs decides to implement the Companies Act

of 2013, global online apparel/fashion retailers selling in India without any physical presence may have to register themselves here. The new Act was passed by the Indian Parliament in August last year. Some sections of the Act came into force from April 1, 2014. However, many sections, including the one related to foreign companies, are yet to be implemented.

As per the Gazette of India issued by the Ministry of Law and Justice, Section 2(42) of the new Companies Act defines ‘foreign company’ as 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.

Under Chapter XXII related to ‘Companies Incorporated Outside India’, the Act states that every foreign company shall, within 30 days of the establishment of its place of business in India, deliver to the Registrar for registration—(a) a certified copy of the charter, statutes or memorandum and articles, of the company or other instrument constituting or defining the constitution of the company; (b) the full address of the registered or principal office of the company; (c) a list of the directors and secretary of the company; (d) the 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; (e) the full address of the office of the company in India which is deemed to be its principal place of business in India; etc.

Also Section 380(2) of the same Chapter further states that “Every foreign company existing at the commencement of this Act shall, if it has not delivered to the Registrar before such commencement, the documents and particulars specified in sub-section (1) of section 592 of the Companies Act, 1956, continue to be subject to the obligation to deliver those documents and particulars in accordance with that act.