Section 386 of the Companies Act, 2013
Section 386 of the Companies Act, 2013 provides definitions specific to Chapter XXII, which relates to Companies Incorporated Outside India (i.e., foreign companies).
🔹 Section 386 – Interpretation (Definitions)
This section gives the meaning of certain terms used in the context of foreign companies in Chapter XXII.
📘 Text of Section 386:
For the purposes of this Chapter:
(a) “Certified” means certified in the prescribed manner to be a true copy or a correct translation;
(b) “Director”, in relation to a foreign company, includes any person in accordance with whose directions or instructions the Board of Directors of the company is accustomed to act;
(c) “Place of business” includes a share transfer or registration office;
(d) “Prospectus” has the same meaning as assigned in Section 2(70).
🧠 Explanation of Terms:
Certified: Any document from a foreign company must be authenticated or certified as genuine or properly translated as per rules.
Director: Even if a person is not formally a director, if they control the board’s actions, they are deemed a director of the foreign company.
Place of business: Not just offices or branches—even a share transfer office in India will count as a place of business.
Prospectus: Refers to any document inviting public subscription of shares or debentures. Defined in Section 2(70).
✅ Why It Matters:
These definitions are important to interpret the rights, duties, and liabilities of foreign companies operating in India under the Companies Act.
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