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Clarification relating to incorporation of a company i.e. company Incorporated outside India

General Circular no. 23/2O14
F. N: 1/ 13/2013 -CL-V
Government of lndia
Ministry of Corporate Affairs
A'Wing, Sth Floor, Shastri Bhawan
Dr. R.P. Road, New Delhi110001
Date:25.06.2014
Regional Directors,
Registrars of Companies,
Stakeholders.
Subject: Clarification relatlng to incorporation of a company i.e.
company Incorporated outside India,

Sir,
Government has received references seeking clarity about the status
of subsidiaries incorporated/to be incorporated by companies incorporated
outside India. Attention has, in particular, been drawn to the absence of the
deeming provision of sub-section (7) of section 4 of the Companies Act, 1956
in the Companies Act, 2013 (New Act).
The matter has been examined in the Ministry in the light of sections
2(68), 2(7I) and 2@7'l of the New Act and it is clarified that there is no bar in
the new Act for a company incorporated outside India to incorporate a
subsidiary either as a public company or a private company. An existing
company, being a subsidiary of a company incorporated outside India,
registered under the Companies Act, 1956, either as private company or a
public company by virtue of section 4(7) of that Act, will continue as a
private company or public companyr as the case may be, without any
change in the incorporation status of such company.
3. This issues with approval of Competent Authority.

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