78 foreign companies registered in India last fiscal year

INTERNATIONAL DESK: As many as 78 foreign companies were registered in the country under the companies law in the last financial year, according to official data. In 2019-20, a total of 124 foreign companies were registered in India. The count was at 118 in 2018-19.

The data was provided by Minister of State for Corporate Affairs Rao Inderjit Singh in a written reply to Rajya Sabha on Tuesday.

Foreign Company is defined under Section 2 (42) of the Companies Act, 2013 (the Act) as any company or body corporate incorporated outside India which (a) has a place of business in India by itself or through an agent, physically or thorough electronic mode and (b) conducts any business activity in India in any other manner,” the minister said.

To a query on whether certain foreign companies /entities are conducting online activities without getting themselves registered, Singh said no such complaint against any unregistered foreign company has been received.

In a separate written reply, the minister said the government has undertaken a special drive for identification and striking off of shell companies.

While noting that there is no definition of the term ‘shell company’ under the Companies Act, 2013, he said, “it normally refers to a company without active business operation or significant assets, which in some cases are used for illegal purpose such as tax evasion, money laundering, obscuring ownership, benami properties etc”.

The Special Task Force set up by the government to look into the issue of shell companies has among other things recommended the use of certain red flag indicators as alerts for identification of such companies.

During the period from 2018 to June 2021, a total of 2,38,223 companies were struck off from the official records under Section 248 of the Act.

Under Section 248, a company can be struck off from the official records subject to certain conditions. These include instances where the Registrar of Companies has a reasonable cause to believe that companies are not carrying on any business or operation for two immediately preceding financial years and have not made any application within such period for obtaining dormant company status.

To a query on whether it is a fact that the government has recognised the land rights as human rights, Singh said that as per inputs provided by the home ministry, there is no document in custody which shows that land rights has been recognised as human rights.

“As per Section 2(d) of the Protection of Human Rights Act, 1993, ‘human rights’ means the rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution of India or embodied in the international covenants and enforceable by courts in India,” he added.

-The Economic Times