Companies Incorporated Outside India
Where not less than fifty per cent.
of the paid-up share capital, whether equity or preference or partly equity and partly preference, of a foreign company is held by one or more citizens of India or by one or more companies or bodies corporate incorporated in India, or by one or more citizens of India and one or more companies or bodies corporate incorporated in India, whether singly or in the aggregate, such company shall comply with the provisions of this Chapter and such other provisions of this Act as may be prescribed with regard to the business carried on by it in India as if it were a company incorporated in India.
Legal Commentary & Landmark Judgments: Section 379
Section 379 establishes the statutory threshold for the applicability of the Companies Act, 2013 to foreign companies, mandating that where not less than 50% of the paid-up share capital of a foreign company is held by Indian citizens or Indian corporate bodies, Chapter XXII and specified domestic provisions apply to its Indian business as if it were an Indian incorporated company.
When advising foreign multinational entities or challenging RoC show-cause notices, examine whether equity shareholding by Indian residents or Indian corporate subsidiaries crosses the 50% threshold. If crossed, file a comprehensive corporate disclosure under Form FC-1 within 30 days and ensure the accounts of the Indian branch comply strictly with Chapter IX (Accounts of Companies) and Schedule III standards.