1.1. COMPANY [ Sec. 2(17) ]
A "Company" means-
(i) any Indian company, or
(ii) any body corporate incorporated by or under the laws of a country outside India, i.e. Foreign Company as defined u/s 2(23A)] or
(iii) any institution, association or body which is or was assessable or was assessed as a company for any assessment year under the Indian Income-tax Act, 1922 or
(iv) any institution, association or body, whether incorporated or not and whether Indian or non-Indian, which is declared by general or special order of the Board to be a company:
1.2. INDIAN COMPANY [ Sec. 2(26)]
"Indian company" means a company formed and registered under the Companies Act, 1956, and includes-
(i) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir [and the Union territories specified in sub-clause (iii) of this clause]);
(ia) a corporation established by or under a Central, State or Provincial Act;
(ib) any institution, association or body which is declared by the Board to be a company under section 2(17);
(ii) in the case of the State of Jammu and Kashmir, a company formed and registered under any law for the time being in force in that State;
(iii) in the case of any of the Union territories of Dadra andNagar Haveli, Goa, Daman and Diu, and Pondicherry, a company formed and registered under any law for the time being in force in that Union territory:
Provided that the registered or principal office of the company, corporation, institution, association or body, in all cases is in India.
Section 6(3). Residential Status of an Indian Company
Indian companies are always treated as Resident in India whether Control and Management is in India or outside India.
1.3. FOREIGN COMPANY [ Sec. 2(23A) ]
It means a company which is not a domestic company, i.e. a company registered outside India in any other foreign country.
The Foreign Company may be treated as Domestic Company if such company makes prescribed arrangement in India as per Rule 27.
Rule 27. Prescribed arrangement for declaration and payment of dividends within India.
The arrangements referred to in sections 194 and 236 to be made by a company for the declaration and payment of dividends ( including dividends on preference shares) within India shall be as follows :
The share-register of the company for all shareholders shall be regularly maintained at its principal place of business within India, in respect of any assessment year from a date not later than the 1st day of April of such year.
The general meeting for passing the accounts of the previous years relevant to the assessment year and for declaring any dividends in respect thereof shall be held only at a place within India.
The Dividend declared , if any, shall be payable only within India to all shareholder
Sec.6(3), Residential Status of foreign Company
Foreign Company is treated as Resident in India if its Control and Management is located wholly in India.
Foreign Company is treated as Non-Resident in India if its Control and Management located wholly / partially Outside India.
Sections applicable to Foreign Company are 44BBB, 44D, 115A, 195 etc.
A Domestic Company means an Indian Company or any other company with respect to its income, liable to tax under the Income-Tax Act, has made the prescribed arrangements for the declaration and payment within India, of the dividends (including dividends on preference shares) payable out of such income.
Thus, all Indian Company are treated as Domestic Company but all Domestic Company are not Indian Company.
If a Foreign Company makes prescribed arrangements for payment of dividends in India it shall be treated as Domestic Company.
1.5. A COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTED [Sec.2(18)]
It includes :
(i) Government Company : A company owned by the Government or the Reserve Bank of India
(ii) A Company having Govt. participation : A Company in which not less than 40% of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by RBI. (i.e. at least 40% of holding should be held by Govt. or RBI)
(iii) Section 25 Companies : Companies registered under section 25 of the Indian Companies Act, 1956. These are companies which are promoted with special object to promote commerce, art, science, charity or religion or any other useful object (these companies lose the status of a company in which the public are substantially interested at any time they declare dividend).
(iv) A Company declared by the CBDT : It is a company without share capital and which having regard to its object, nature and composition of its membership or other relevant consideration is declared by the Board to be a company in which public are substantially interested for the relevant AY.
(v) Mutual Benefit finance Company : Where principal business of the company is acceptance of deposits from its members and which has been declared by the Central Government to be a Nidhi or Mutual Benefit Society.
(vi) A Company having Co-operative Society participation :It is a company in which at least 50% or more equity shares have been held by one or more co-operative societies throughout the PY.
(vii) A Company is deemed to be a Public Company if it is not a Private Company as defined by the Companies Act, 1956 and is fulfilling either of the following two donditions :
A listed Public Company : Its equity share were listed on a recognized stock exchange, as on the last day of the relevant PY ; or
Any other Public Company : Its equity shares carrying at least 50% of the voting power ( in the case of an industrial company the limit is 40%) were beneficially held throughout the relevant PY by Government, a statutory corporation, a company in which the public are substantially interested or a wholly owned subsidiary of such a compan
Widely Held Company : The Company in which the public are substantially interested is also known as wholly held Company.
Closely Held Company : It is a Company in which the public are NOT substantially interested . This type of company is referred in Sec.2(22)(e) and Sec. 79.
1.6. RESIDENTIAL STATUS OF A COMPANY
Indian Company : The Company registered in India is an Indian Company. Indian Company is always treated as Resident in India whether Control & Management is in India or Outside India.
Foreign Company : If Control & Management of the affairs of the business of Foreign Company is situated wholly in India then its residential status is Resident in India. If its Control & Management of the affairs of the business is situated wholly / partially outside India then its Residential Status is Non-Resident in India.