2012 (4) TMI 92 - HC - Companies Law

Court allows incorporation of Indian company for Moscow residents without local address requirement. Decision emphasizes compliance.

The Court ruled in favor of the petitioners, residents of Moscow, Russia, allowing them to incorporate a private limited company in Goa, India, without ... Petition under Article 226 of the Constitution of India, a writ of Mandamus - direct the respondent/Registrar of Companies to register a company without insistence on the petitioners providing a local address - the petitioners are residents of Moscow - They complied with all the requirements of an applicant/ applicants seeking incorporation of a Company - Despite all formalities compiled with , the petitioners were told to make enquiries delaying the process of incorporation and registration of their Private Limited Company – reasons for delay communicated that the foreign subscribers have not stated their local address – one Company of these very subscribers has been registered as a Private Limited Company in the State of Maharashtra - an affidavit was filed by Registrar while signing MOA and AOA in respect of existing Company, the foreign subscribers showed their presence in India - period of stay is more than 3 months hence requirement of furnishing local address - Held that:- the petition succeeds. The Respondent is directed to register and incorporate the private limited Company in the State of Goa provided the petitioners comply with all other rules and regulations and requirements thereof save and except furnishing of the local address. Issues:1. Whether foreign subscribers incorporating a private limited company in India must disclose their local address.Analysis:The petitioners, residents of Moscow, Russia, sought to incorporate a private limited company in Goa, India. They fulfilled all requirements, including submitting forms, fees, and passports, but were told to provide a local address for registration. The petition challenged this requirement, arguing it was not mandated by the Companies Act, 1956, and was unfair and discriminatory. The Registrar of Companies, Goa, defended the requirement, stating it was necessary for compliance and security reasons.Upon review, the Court found no legal basis for mandating foreign subscribers to disclose their local address. The Court examined relevant provisions and regulations, finding no such requirement. The respondent failed to justify the insistence on a local address, citing security concerns. The Court noted that a similar company with the same foreign subscribers was registered in Maharashtra without such a requirement, highlighting the inconsistency in enforcement.The Court also considered the practical aspects, such as the appointment of local staff to receive communications on behalf of the petitioners. It concluded that adequate provisions existed for security agencies to reach foreign nationals, dismissing concerns about lack of local support for compliance or legal issues.Ultimately, the Court ruled in favor of the petitioners, directing the registration and incorporation of the private limited company in Goa without the need to provide a local address. The decision emphasized compliance with all other rules and regulations under the Companies Act, 1956, except for the local address requirement. The authorities were permitted to enforce other laws and take necessary actions against the petitioners for non-compliance or overstaying in India, in accordance with the law.In conclusion, the writ petition was disposed of without costs, granting relief to the petitioners by allowing the registration and incorporation of the company without the disputed local address requirement.