# Foreign Company — Section 2(42)
## Definition
'Foreign Company' means any company or body corporate incorporated outside India which —
(a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; AND
(b) conducts any business activity in India in any other manner.
Both conditions must be satisfied cumulatively.
## Meaning of 'Electronic Mode' — Rule 2(1)(c) of Companies (Specification of Definitions Details) Rules, 2014
'Electronic mode' means carrying out electronically based, whether main server is installed in India or not, including, but not limited to:
1. Business to business and business to consumer transactions, data interchange and other digital supply transactions;
2. Offering to accept deposits or inviting deposits or accepting deposits or subscriptions in securities, in India or from citizens of India;
3. Financial settlements, web-based marketing, advisory and transactional services, database services and products, supply chain management;
4. Online services such as telemarketing, telecommuting, telemedicine, education and information research; AND
5. All related data communication services whether conducted by e-mail, mobile devices, social media, cloud computing, document management, voice or data transmission or otherwise.
## Why It Matters
Once a body corporate is classified as a foreign company, the provisions of Chapter XXII (Sections 379 to 393) and the Companies (Registration of Foreign Companies) Rules, 2014 apply — including:
- Registration with ROC within 30 days of establishment of place of business (Form FC-1)
- Maintenance of books of account in India
- Filing of financial statements (Form FC-3)
- Filing of annual return (Form FC-4)
## Section 379 — When Cos. Act Applies
Where not less than 50% of paid-up share capital (whether equity or preference, or partly equity and partly preference) of a foreign company is held by:
- one or more citizens of India, or
- one or more companies/bodies corporate incorporated in India, or
- one or more citizens of India and one or more companies/bodies corporate incorporated in India,
whether singly or in aggregate, such company shall comply with the provisions of Chapter XXII and such other provisions of this Act as may be prescribed, as if it were a company incorporated in India.