Based on the applicable provisions of the Companies Act, 2013, define the term "foreign company" and identify which among the following companies…

As per section 2 (42) of the Companies Act, 2013 (the Act), "Foreign Company" means any company or body corporate incorporated outside India which has a place of business in India whether by itself or through an agent, physically or through electronic mode; and conducts any business activity in India in any other manner. So, as per the definition, we can conclude: Case 1: Place of Incorporation – Singapore. Developed patient's database for a Hospital in Mumbai – Server at Singapore. It is a Foreign Company. Though incorporated outside India, it is involved in transacting business in India and having place of business through electronic mode. Hence, it is a foreign company. Case 2: Place of Incorporation – UAE. No place of business in India, but employs agents in India. It is not a foreign company. Since the company, though employed agents in India, but has no place of business in India. Hence, it is not a foreign company. Case 3: Place of Incorporation and Registered Office – Cape Town; Board Meeting held in Leh, India. It is not a foreign company. Mere holding of meetings in India cannot be termed as conducting business activity in India. Hence, it is not a foreign company. Case 4: Place of Incorporation and Registered Office – Germany; 49% shares are held by an Indian Company. As per the question, the company is registered in Germany and no information is available about any business(es) being carried on by the company in India which is a basic condition to be fulfilled for being called a foreign company. Under the circumstances, it is just a company incorporated outside India and shall not be considered as a foreign company. Alternate Answer Applying the provisions of section 379 (2) of the Companies Act, 2013, if not less than 50% of the shareholding of a foreign company is held by an Indian Company; it is treated as an Indian Company, on which provisions of Chapter XXII of the Companies Act, 2013 applies. Here, only 49 % is held by Indian Company. Hence it is a foreign company.