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Section 386: Interpretation

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Section 385 All 470 Sections of Companies Act Section 387
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Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 386

Section 386 provides essential definitions for Chapter XXII, defining 'certified', 'director', and 'place of business' to ensure effective statutory interpretation and regulatory coverage over foreign enterprises operating in India.

  • Definition of Certified Copy: Defines 'certified' as a copy certified in the prescribed manner by foreign public authorities or notaries, verified by Indian diplomatic or consular officers under the Hague Apostille Convention.
  • Expansive Definition of Director: Defines 'director' to include any person in accordance with whose directions or instructions the Board of Directors of the foreign company is accustomed to act (shadow directors).
  • Inclusive Definition of Place of Business: Clarifies that 'place of business' includes a share transfer or share registration office, representative office, or digital business portal operating within the territory of India.
Key Landmark Precedents:
  • Salomon v. Salomon & Co. Ltd., [1897] AC 22: Established fundamental corporate personality principles while recognizing that statutory definitions may expand the category of directors to include persons exercising de facto control over corporate decisions.
  • Lord Advocate v. Huron and Erie Loan and Savings Co., [1911] AC 477: Held that establishing a place of business requires an identifiable commercial nexus where the company invites or conducts habitual business transactions.
Courtroom Practice & Strategic Litigation Guidance:

When drafting pleadings against foreign parent entities attempting to evade Indian jurisdiction, rely on the expansive definition of 'director' under Section 386(b). Demonstrate that local managers act under the direct instruction of overseas executives, thereby establishing shadow directorship and piercing the corporate veil in appropriate cases of fraud or regulatory breach.

Section 385 All 470 Sections of Companies Act Section 387