# Rule 12 — Action for Improper Use or Description as Foreign Company
## The Rule
If any person(s) trade or carry on business in any manner under any name, title or description as a foreign company registered under the Act or Rules — but is NOT duly registered as a foreign company under the Act and Rules — then such person(s) shall be:
- Liable for investigation under Section 210 of the Companies Act, 2013
- Subject to action consequent upon that investigation
## What is Section 210?
Section 210 empowers the Central Government to order investigation into the affairs of a company by inspectors appointed by it.
## Why this Rule Exists
To prevent impersonation and fraudulent representation by Indian or other entities that:
- Pose as foreign companies to gain credibility,
- Misrepresent their registration status, OR
- Use 'foreign company' branding without authority.
## Plain-English Test
```
Is the entity:
- Describing itself as a foreign company AND
- Carrying on business under that description?
│
├── YES → Is it duly registered under Chapter XXII?
│ ├── YES → Lawful, no Rule 12 action
│ └── NO → Section 210 investigation + consequential action
└── NO → Rule 12 not triggered
```