Section 374 of the Companies Act, 2013
Section 374 of the Companies Act, 2013
– "Obligations of Companies Registering Under This Part"
This section applies to companies that are registered under Part XXI of the Companies Act, 2013 (i.e., companies incorporated outside India or unregistered companies that apply for registration in India under the Act).
✅ Key Provisions of Section 374:
When a company registers under Part XXI (i.e., Section 366 to 374), it must comply with the following obligations:
Compliance with Requirements:
The company must comply with the provisions of the Companies Act, 2013 as applicable to the type of company it is registered as (e.g., private, public, etc.).
No Limited Liability Without Approval (for Partnerships or LLPs):
If a firm, LLP, or unregistered company intends to register as a company limited by shares or by guarantee, it must obtain prior approval from the Central Government.
The application must include written consent from all partners or members.
Restriction on Charitable Objects:
If the company is being registered under Section 8 (i.e., for charitable or non-profit purposes), it must comply with Section 8 requirements, and all assets and liabilities of the existing entity will vest in the new company.
Registrar’s Duties:
The Registrar may refuse registration if the applicant fails to comply with the conditions laid out under this section.
📌 Purpose of Section 374:
To ensure that entities registering under Part XXI do so in accordance with the law and carry over their obligations and structure in a compliant manner under Indian company law.
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