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Recently, while submitting e-form FC-2 (Return of Alteration in Documents Filed for Registration of a Foreign Company) under Section 380(3) of the Companies Act, 2013, read with Rule 3(4) of the Companies (Registration of Foreign Companies) Rules, 2014 with the Ministry of Corporate Affairs ("MCA"), we encountered a challenge that highlights a broader systemic issue.
Every foreign company conducting business in India through an establishment such as project office, branch office and liaison office, is required to submit e-form FC-2 to report changes in the details of foreign company already furnished with the MCA. One such change, to be intimated, is change in the directors and company secretary of the foreign company ("Officers of Foreign Company"). This is merely an intimation of changes occurring in the management of the foreign company outside India and has no bearing on the office established in India. While filing e-form FC-2 on MCA V3, the system mandatorily prompts for PAN details of Officers of Foreign Company. It is pertinent to note that the Officers of Foreign Company are not legally required to obtain PAN as these individuals are neither residents nor directors of an Indian incorporated entity. Notably, this requirement did not exist earlier under either in the MCA V2 or in initial version of MCA V3 and appears to be the recent amendment to the form.
The aforesaid e-form submitted with the MCA is a procedural requirement and such changes in the form reflects a larger compliance risk for foreign entities due to imposition of unwarranted requirement upon its directors which are not legally tenable.
A technology platform should enable compliance not override statutory provisions. Aligning MCA forms with the legal framework is essential, especially for foreign entities, as India continues to position itself as a global business hub, seamless integration between law and digital system becomes critical.
Have others faced similar challenges with MCA V3 filings for foreign companies? It would be valuable to hear your experiences and perspectives.
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