India has 3,291 active foreign companies; no plan to cancel registration of inactive overseas companies: Govt

There are 1,777 foreign companies that have closed their place of business in India, the minister said

There are 3,291 foreign companies that are active out of the 5,068 such companies registered in the country, Union minister Rao Inderjit Singh said on Monday.

In a written reply to the Lok Sabha, he also said the corporate affairs ministry is not considering cancelling the registration of inactive overseas companies.

The corporate affairs ministry is implementing the Companies Act, 2013. Companies operating in the country are registered under this Act.

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"There are 3,291 number of foreign companies having active status. Foreign companies are registered by Registrar of Companies (RoC), Delhi after approval is given by RBI. There are 5,068 foreign companies registered as on 27.07.2022," the Minister of State for Corporate Affairs said.

Generally, active companies are those that are regular in making statutory filings under the Act and complying with various requirements.

He also said that there are 1,777 foreign companies that have closed their place of business in India.

Responding to a query, the minister said that registered foreign shell companies are not defined under the provisions of the Act.

"However, foreign companies are defined under the provisions of section 2(42) of the Act, according to which a company or body corporate incorporated outside India which has a place of business in India whether by itself or through an agent, physically or through electronic mode and conducts any business activity in India in any other manner is a foreign company," Singh noted.

Companies incorporated outside India can close their places of business in India due to reasons, such as cessation of operation of branch office/ rental agreement and expiration of validity granted by the Reserve Bank of India (RBI).

In a separate written reply, the minister said that as of date, the Serious Fraud Investigation Office (SFIO) has been asked to probe 119 cases from 2017-18 onwards.

Securities and Exchange Board of India (Sebi) has informed that it has not identified any listed company that has committed corporate fraud during 2020-21, 2021-22 and 2022-23 up to June 30 this year, he added.

The minister, in another written reply, said the new version of its MCA21 portal will have a module with the capability to send notices automatically to entities for non-compliance.

The ministry holds drives for compliance with various sections of the Act from time to time wherein notices are generated on certain parameters and sent by email to the companies.

"Further, a Compliance Management module has been envisaged in MCA21 Version 3 that will have the capability to send automatic notices for non-compliance," Singh said.

The third version of MCA21, which is mainly used to submit filings under the Act, is being launched and deployed in phases.

This includes company and LLP modules, e-adjudication, e-consultation, e-book, Learning Management and Compliance Management System driven by data analytics, artificial intelligence and machine learning.

"The 1st phase of MCA21 V3 was launched in May 2021 with the launch of e-book module, e-consultation module and revamped website. Learning Management System Module was launched in October 2021. LLP Module has been launched in March 2022. The process of development and testing of other modules is in progress," the minister said.