# Accounts of a Foreign Company — Section 381

## Core Obligation

Every foreign company shall, in every calendar year:

1. Prepare a balance sheet and profit & loss account in such form, containing such particulars and including/annexing such documents as may be prescribed; and

2. Deliver a copy of these accounts to the Registrar (ROC, New Delhi).

## Central Government's Power to Exempt

The Central Government may, by notification, direct that any of the requirements (1) or (2) above shall not apply or shall apply only subject to exceptions and modifications, to any foreign company or class of foreign companies.

## Language Requirement

If any document is not in English, it must be accompanied by a certified translation in English.

## Companies (Registration of Foreign Companies) Rules, 2014

Foreign company shall prepare financial statements of its Indian business operations in accordance with Schedule III (or as close as possible to it) for each financial year, including:
Documents relating to copies of the latest consolidated financial statements of the parent foreign company (in English)

## Additional Documents Required Along with Financial Statements

#	Statement
1	Statement of Related Party Transactions
2	Statement of Repatriation of Profits
3	Statement of Transfer of Funds (including dividends) between the foreign company and its Indian branches

## Audit

The accounts pertaining to Indian business operations must be audited by a practising Chartered Accountant in India.

## Chapter X Applicability

The provisions of Chapter X (Audit and Auditors) apply mutatis mutandis to the audit of Indian business accounts of a foreign company.

Worked example

### Example 1

Q. A US foreign company has branches in Mumbai and Bengaluru. Whose accounts must be audited under Sec 381 and by whom?

A. The accounts pertaining to its Indian business operations (Mumbai + Bengaluru combined) must be audited by a practising Chartered Accountant in India. Global accounts need not be re-audited but must be filed in English.

### Example 2

Q. A foreign company filed accounts in French. Is this compliant?

A. No. A certified English translation must accompany the French documents.

⚠️ Common exam mistakes

Forgetting that the auditor must be a CA practising in India — not the foreign auditor of the parent.
Filing only Indian branch accounts without the consolidated parent accounts.
Missing the three additional statements (RPT, repatriation, transfer of funds).
Using 'financial year' (April–March) — Sec 381 speaks of 'every calendar year' coverage of the obligation, though Indian operations follow the FY.

Bare-Act text Section 381 · Companies Act, 2013 · click to expand

Section 381(1): Every foreign company shall, in every calendar year, — (a) make out a balance sheet and profit and loss account in such form, containing such particulars and including or having annexed or attached thereto such documents as may be prescribed; and (b) deliver a copy of those documents to the Registrar.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Accounts of Foreign Company [Sec 381]

Worked example

⚠️ Common exam mistakes