Clarification regarding closure of place of business by a Foreign Company
MCA issued a Circular dated 22nd February, 2017 clarifying the scope of Section 391(2) of Companies Act, 2013. Section 391(2) states that the provisions of Chapter XX shall apply mutatis mutandis for closure of place of business of a foreign company in India as if it were a company incorporated in India.
However, Stakeholders sought a clarification regarding applicability of its scope. MCA noted in the Circular that Section 391(1) and Section 391(2) shall be read harmoniously.
Accordingly, it is clarified that provision of Section 391(2) of Companies Act, 2013 would apply only in case of a foreign company which has issued prospectus or IDRs pursuant to provisions of Chapter XXII of Companies Act, 2013.
Copy of such Circular can be accessed at below link: