Govt to regulate foreign cos having online ops in India

The government has brought under the Companies Act foreign companies that operate in the electronic mode but are not registered in India so as to safeguard consumer interest.

The move comes against the backdrop of certain foreign entities conducting online activities in India without getting themselves registered in the country. "The Companies Bill, 2012, Clause 2(42) defining 'foreign company' has widened the scope of foreign companies to include companies operating through electronic mode," Corporate Affairs Minister Sachin Pilot today said in a written reply to the Lok Sabha.

The move aims at regulating online activities of foreign companies that are not required to file registration documents with the Registrar as well as to "better safeguard the interest of Indian consumers and investors", he said. "Further, the provision in respect of inspection, inquiry and investigation proposed in clause 206 to 229 of the proposed Bill shall also be applicable to foreign companies," the minister noted.

The new Companies Bill, approved by the Lok Sabha, is awaiting nod from the Rajya Sabha.In a separate reply, Pilot said 453 foreign companies were registered in the country in the last two financial years. While 231 firms were registered in 2011-12 period, the number stood at 222 during 2010-11 fiscal.