Section 591 - Application of sections 592 to 602 to foreign companies
1 [(1)] Sections 592 to 602, both inclusive, shall apply to all foreign companies, that is to say, companies falling under the following two classes, namely:-
(a) companies incorporated outside India which, after the commencement of this Act, establish a place of business within India; and
(b) companies incorporated outside India which have, before the commencement of this Act, established a place of business within India and continue to have an established place of business within India at the commencement of this Act.
2 [(2) Notwithstanding anything contained in sub-section (1), 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 company incorporated outside India and having an established place of business in India, is held by one or more citizens of India or by one or more bodies corporate incorporated in India, or by one or more citizens of India and one or more bodies corporate incorporated in India, whether singly or in the aggregate, such company shall comply with such of the 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.]
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1. Section 591 re-numbered as sub-section (1) thereof by Act 41 of 1974, Section 32 (w.e.f. 1-2-1975).
2. Inserted by Act 41 of 1974, Section 32 (w.e.f. 1-2-1975).
Section 592 - Documents, etc., to be delivered to Registrar by foreign companies carrying on business in India
(1) Foreign companies which, after the commencement of this Act, establish a place of business within India shall, within1[thirty days] of the establishment of the establishment of the place of business, 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; and, if the instrument is not in the English language, a certified translation thereof;
(b) the full address of the registered or principal office of the company;
(c) a list of the directors and secretary of the company, containing the particulars mentioned in sub-section (2);
(d) the name and address or the names and addresses of some 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; and
(e) the full address of the office of the company in India which is to be deemed its principal place of business in India.
(2) The list referred to in clause (c) of sub-section (1) shall contain the following particulars, that is to say:-
(a) with respect to each director,-
(i) in the case of an individual, his present name and surname in full, any former name or names and surname or surnames in full, his usual residential address, his nationality, and if that nationality is not the nationality of origin, his nationality of origin, and his business occupation, if any, or if he has no business occupation but holds any other directorship or directorships, particulars of that directorship or of some one of those directorships; and
(ii) in the case of a body corporate, its corporate name and registered or principal office; and the full name, address, nationality, and nationality of origin, if different from that nationality, of each of its directors;
(b) with respect to the secretary, or where there are joint secretaries, with respect to each of them-
(i) in the case of an individual, his present name and surname, any former name or names and surname or surnames, and his usual residential address; and
(ii) in the case of a body corporate, its corporate name and registered or principal office:
Provided that, where all the partners in a firm are joint secretaries of the company, the name and principal office of the firm may be stated instead of the particulars mentioned in clause (b) of this sub-section,
(3) Clauses (2) and (3) of the Explanation to sub-section (1) of section 303 shall apply for the purpose of the construction of references in sub-section (2) to present and former names and surnames as they apply for the purposes of the construction of such references in sub-section (1) of section 303.
(4) Foreign companies, other than those mentioned in sub-section (1), shall, if they have not delivered to the Registrar before the commencement of this Act the documents and particulars specified in sub-section (1) of section 277 of the Indian Companies Act, 1913 (7 of 1913), continue to be subject to the obligation to deliver those documents and particulars in accordance with that Act.
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1. Substituted by Act 31 of 1965, Section 62 and Schedule, for "one month" (w.e.f. 15-10-1965).
Section 593 - Return to be delivered to Registrar by foreign company where documents, etc., altered
If any alteration is made or occurs in-
(a) the charter, statutes, or me morandum and articles of a foreign company or other instrument constituting or defining the constitution of a foreign company; or
(b) the registered or principal office of a foreign company; or
(c) the directors or secretary of a foreign company1[***]; or
(d) the name or address of any of the persons authorised to accept service on behalf of a foreign company; or
(e) the principal place of business of the company in India;
the company shall, within the prescribed time, deliver to the Registrar for registration a return containing the prescribed particulars of the alteration.
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1 . Certain words omitted by Act 31 of 1965, Section 57 (w.e.f. 15-10-1965).
Section 594 - Accounts of foreign company
(1) Every foreign company shall, in every calendar year,
(a) make out a balance sheet and profit and loss account in such form, containing such particulars and including or having annexed or attached thereto such documents (including, the particular documents relating to every subsidiary of the foreign company) as under the provisions of this Act it would, if it had been a company within the meaning of this Act, have been required to make out and lay before the company in general meeting; and
(b) deliver three copies of those documents to the Registrar:
Provided that the Central Government may, by notification in the Official Gazette, direct that, in the case of any foreign company or class of foreign company the requirements of clause (a) shall not apply, or shall apply subject to such exceptions and modifications as may be specified in the notification.
(2) If any such document as is mentioned in sub-section (1), is not in the English language, there shall be annexed to it a certified translation thereof.
(3) Every foreign company shall send to the Registrar with the documents required to be delivered to him under sub-section (1), three copies of a list in the prescribed form of all places of business established by the company in India as at the date with reference to which the balance sheet referred to in sub-section (1), is made out.
Section 595 - Obligation to state name of foreign company, whether limited, and country where incorporated
Every foreign company shall-
(a) in every prospectus inviting subscriptions in India for its shares or debentures, state the country in which the company is incorporated;
(b) conspicuously exhibit on the outside of every office or place where it carries on business in India, the name of the company and the country in which it is incorporated, in letters easily legible in English characters, and also in the characters of the language or one of the languages in general use in the locality in which the office or place is situate;
(c) cause the name of the company and of the country in which the company is incorporated, to be stated in legible English characters in all business letters, bill-heads and letter paper, and in all notices,1[***] and other official publications of the company; and
(d) if the liability of the members of the company is limited, cause notice of that fact-
(i) to be stated in every such prospectus as aforesaid and in all business letters, bill-heads, letter paper, notices, advertisements and other official publications of the company, in legible English characters; and
(ii) to be conspicuously exhibited on the outside of every office or place where it carries on business in India, in legible English characters and also in legible characters of the language or one of the languages in general use in the locality in which the office or place is situate.
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1 . The word "advertisements" omitted by Act 65 of 1960, Section 193 (w.e.f. 28-12-1960).
Section 596 - Service on foreign company
Any process, notice, or other document required to be served on a foreign company shall be deemed to be sufficiently served, if addressed to any person whose name has been delivered to the Registrar under the foregoing provisions of this Part and left at, or sent by post to, the address which has been so delivered:
Provided that
(a) where any such company makes default in delivering to the Registrar the name and address of a person resident in India who is authorised to accept on behalf of the company service of process, notices or other documents; or
(b) if at any time all the persons whose names and addresses have been so delivered are dead or have ceased so to reside, or refuse to accept service on behalf of the company, or for any reason, cannot be served,
a document may be served on the company by leaving it at, or sending it by post to, any place of business established by the company in India.
Section 597 - Office where documents to be delivered
(1) Any document which any foreign company is required to deliver to the Registrar shall be delivered to the Registrar having jurisdiction over New Delhi, and references to the Registrar in this Part [except in sub-section (2)] shall be construed accordingly.
(2) Any such document as is referred to in sub-section (1) shall also be delivered to the Registrar of the State in which the principal place of business of the company is situate.
(3) If any foreign company ceases to have a place of business in India, it shall forthwith give notice of the fact to the Registrar, and as from the date on which notice is so given, the obligation of the company to deliver any document to the Registrar shall cease, provided it has no other place of business in India.
Section 598 - Penalties
If any foreign company fails to comply with any of the foregoing provisions of this Part, the company, and every officer or agent of the company who is in default, shall be punishable with fine which may extend to1[ten thousand rupees], and in the case of a continuing offence, with an additional fine which may extend to2[one thousand rupees] for every day during which the default continues.
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1. Substituted by Act 53 of 2000, Section 215, for "one thousand rupees" (w.e.f. 13-12-2000).
2. Substituted by Act 53 of 2000, Section 215, for "one hundred rupees" (w.e.f. 13-12-2000).
Section 599 - Company's failure to comply with Part not to affect its liability under contracts, etc.
Any failure by a foreign company to comply with any of the foregoing provisions of this Part shall not affect the validity of any contract, dealing or transaction entered into by the company or its liability to be sued in respect thereof; but the company shall not be entitled to bring any suit, claim any set-off, make any counter-claim or institute any legal proceeding in respect of any such contract, dealing or transaction, until it has complied with the provisions of this Part.
Section 600 - Registration of charges, appointment of receiver and books of account
(1) The provisions of Part V (sections 124 to 145); shall apply mutatis mutandis to--
(a) charges on properties in India which are created by a foreign company after the 15th day of January, 1937; and
(b) charges on property in India which is acquired by any foreign company after the day aforesaid:
Provided that where a charge is created, or the completion of the acquisition of the property takes place, outside India, sub-section (5) of section 125 and the proviso to sub-section (1) of section 127 shall have effect as if the property, wherever situated, were situated outside India.
(2) The provisions of section 118 shall apply mutatis mutandis to a foreign company.
(3) 1 [(a)] The provisions of section 209 shall apply to a foreign company to the extent of requiring it to keep at its principal place of business in India the books of account referred to in that section, with respect to moneys received and expended, sales and purchases made, and assets and liabilities, in the course of of in relation to its business in India.
2 [(b) On and from the commencement of the Companies (Amendment) Act, 1974,--
(i) the provisions of section 159 shall, subject to such modifications or adaptations as may be made therein by the rules made under this Act, apply to a foreign company having an established place of business in India, as they apply to a company incorporated in India;
(ii) the provisions of sections 209, 209A 233A and 233B and sections 234 to 246 (both inclusive) shall, so far as may be, apply only to the Indian business of a foreign company having an established place of business in India, as they apply to a company incorporated in India.]
(4) In applying the sections referred to in sub-sections (1), (2) and (3) to a foreign company as aforesaid, references in those sections to the Registrar shall be deemed to be references to the Registrar having jurisdiction over New Delhi, and references to the registered office of the foreign company shall be deemed to be references to its principal place of business in India.
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1. Sub-section (3) re-lettered as clause (a) thereof by Act 41 of 1974, Section 33 (w.e.f. 1-2-1975).
2. Inserted by Act 41 of 1974, Section 33 (w.e.f. 1-2-1975).
Section 601 - Fees for registration of documents under Part
There shall be paid to the Registrar for registering any document required by the foregoing provisions of this Part to be registered by him, such fees as may be prescribed.
Section 602 - Interpretation of foregoing sections of Part
For the purposes of the foregoing provisions of this Part--
(a) the expression "certified" means certified in the prescribed manner to be a true copy or a correct translation;
(b) the expression "director", in relation to a company, includes any person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act;
(c) the expression "place of business" includes a share transfer or share registration office;
(d) the expression "prospectus" has the same meaning as when used in relation to a company incorporated under this Act; and
(e) the expression "secretary" includes any person occupying the position of secretary, by whatever name called.
Section 603 to 608 - Prospectuses
Section 603 - Dating of prospectus and particulars to be contained therein
(1) No person shall issue, circulate or distribute in India any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, unless the prospectus is dated; and
(a) contains particulars with respect to the following matters:--
(i) the instrument constituting or defining the constitution of the company;
(ii) the enactments or provisions having the force of enactments, by or under which the incorporation of the company was effected;
(iii) an address in India where the said instrument, enactments, or provision, or copies thereof, and if the same are not in English, a translation thereof certified in the prescribed manner, can be inspected;
(iv) the date on which and the country in which the company was incorporated;
(v) whether the company has established a place of business in India, and, if so, the address of its principal office in India; and
(b) subject to the provisions of this section, states the matters specified in Part I of Schedule II and sets out the reports specified in Part II of that Schedule, subject always to the provisions contained in Part III of that Schedule:
Provided that sub-clauses (i), (ii) and (iii) of clause (a) shall not apply in the case of a prospectus issued more than two years after the date at which the company is entitled to commence business; and in the application of Part I of Schedule II for the purposes of this sub-section, clause 2 thereof shall have effect with the substitution, for references to the articles, of references to the constitution of a company.
(2) Any condition requiring or binding an applicant for shares or debentures to waive compliance with any requirement imposed by virtue of clause (a) or (b) of subsection (1), or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, shall be void.
(3) No person shall issue to any person in India a form of application for shares in or debentures of such a company or intended company as is mentioned in sub-section (I), unless the form is issued with a prospectus which complies with the provisions of this Part and the issue whereof in India does not contravene the provisions of section 604:
Provided that this sub-section shall not apply if it is shown that the form of application was issued in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures.
(4) In the event of non-compliance with or contravention of any of the requirements imposed by clauses (a) and (b) of sub-section (1), a director or other person responsible for the prospectus shall not incur any liability by reason of the non-compliance or contravention, if--
(a) as regards any matter not disclosed, he proves that he had no knowledge thereof; or
(b) he proves that the non-compliance or contravention arose from an honest mistake of fact on his part; or
(c) the non-compliance or contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial, or was otherwise such as ought in the opinion of that court, having regard to all the circumstances of the case, reasonably to be excused:
Provided that, in the event of failure to include in a prospectus a statement with respect to the matters contained in clauses 18 of Schedule II, no director or other person shall incur any liability in respect to the failure, unless it be proved that he had knowledge of the matters not disclosed.
(5) This section--
(a) shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce, in favour of other persons; and
(b) except in so far as it requires a prospectus to be dated, shall not apply to the issue of a prospectus relating to shares or debentures which are or are to be in all respects uniform with shares or debentures previously issued and for the time being dealt in or quoted on a recognised stock exchange,
but, subject as aforesaid, this section shall apply to a prospectus or form, of application whether issued on or with reference to the formation of a company or subsequently.
(6) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or under this Act apart from this section.
Section 604 - Provisions as to expert's consent and allotment
(1) No person shall issue, circulate or distribute in India any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India--
(a) if, where the prospectus includes a statement purporting to be made by an expert, he has not given, or has before delivery of the prospectus for registration withdrawn, his written consent to the issue of the prospectus with the statement included in the form and context in which it is included, or there does not appear in the prospectus a statement that he has given and has not withdrawn his consent as aforesaid; or
(b) if the prospectus does not have the effect, where an application is made in pursuance thereof, of rendering all persons concerned bound by all the provisions (other than penal provisions) of sections 72, 73, and 74, so far as applicable.
(2) In this section, the expression "expert" includes an engineer, a valuer, an accountant and any other person whose profession gives authority to a statement made by him; and for the purposes of this section a statement shall be deemed to be included in a prospectus if it is contained in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith.
Section 605 - Registration of prospectus
1 [(1)] No person shall issue, circulate or distribute in India any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, unless before the issue, circulation or distribution of the prospectus in India, a copy thereof certified by the chairman and two other directors of the company as having been approved by resolution of the managing body has been delivered for registration to the Registrar and the prospectus states on the face of it that a copy has been so delivered, and there is endorsed on or attached to the copy--
(a) any consent to the issue of the prospectus required by section 604;
(b) a copy of any contract required by clause 16 of Schedule II to be stated in the prospectus or, in the case of a contract not reduced into writing, a memorandum giving full particulars thereof; and
(c) where the persons making any report required by Part II of Schedule II have made therein, or have, without giving the reasons, indicated therein, any such adjustments as are mentioned in clause 32 of that Schedule, a written statement signed by those persons setting our the adjustments and giving the reasons therefor.
(2) The references in clause (b) of sub-section (1) to the copy of a 2 [contract] required thereby to be endorsed on or attached to a copy of the prospectus shall, in the case of a contract wholly or partly in a language other than English, be taken as references to a copy of a translation of the contract in English or a copy embodying a translation in English of the parts which are not in English, as the case may be, being a translation certified in the prescribed manner to be a correct translation.
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1. Inserted by Act 36 of 1957, Section 3 and Schedule II (w.e.f. 17-9-1957).
2. Substituted by Act 36 of 1957, Section 3 and Schedule II, for "contractor (w.e.f. 17-9-1957).
Section 605A - Offer of Indian Depository Receipts
1[605A. Offer of Indian Depository Receipts
Notwithstanding anything contained in any other law for the time being in force, the Central Government may make rules applicable for--
(a) the offer of Indian Depository Receipts;
(b) the requirement of disclosures in prospectus or letter of offer issued in connection with Indian Depository Receipts;
(c) the manner in which the Indian Depository Receipts shall be dealt in a depository mode and by custodian and underwriters;
(d) the manner of sale, transfer or transmission of Indian Depository Receipts,
by a company incorporated, or to be incorporated outside India, whether the company has or has not been established or, will or will not establish any place of business in India.]
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1. Inserted by Act 53 of 2000, Section 216 (w.e.f. 13-12-2000).
Section 606 - Penalty for contravention of sections 603, 604 and 605
Any person who is knowingly responsible--
(a) for the issue, circulation or distribution of a prospectus; or
(b) for the issue of a form of1[application for shares, debentures; or Indian Depository Receipts],
in contravention of any of the provisions of sections 603 , 6042[, 605 and 605 A], shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to3[fifty thousand rupees], or with both.
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1. Substituted by Act 53 of 2000, Section 217, for "application for shares or debentures" (w.e.f. 13-12-2000) .
2. Substituted by Act 53 of 2000, Section 217, for "and 605" (w.e.f. 13-12-2000) .
3. Substituted by Act 53 of 2000, Section 217, for "five thousand rupees" (w.e.f. 13-12-2000) .
Section 607 - Civil liability for mis-statements in prospectus
Section 62 shall extend to every prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside India, whether the company has or has not established, or when formed will or will not establish, a place of business in India, with the substitution for references, in section 62 to section 60 of this Act, of references to section 604 thereof.
Section 608 - Interpretation of provisions as to prospectuses
(1) Where any document by which any shares in, or debentures of, a company incorporated outside India are offered for sale to the public, would, if the company concerned had been a company within the meaning of this Act, have been deemed by virtue of section 64, to be a prospectus issued by the company, that document shall be deemed, for the purposes of this Part, to be a prospectus issued by the company offering such shares or debentures for subscription.
(2) An offer of shares or debentures for subscription or sale to any person whose ordinary business it is to buy or sell shares or debentures, whether as principal or as agent, shall not be deemed to be an offer to the public for the purposes of this Part.
(3) In this Part, the expressions "prospectus", "shares" and "debentures" have the same meanings as when used in relation to a company incorporated under this Act.