Company’s failure to comply with provisions of this Chapter not to affect validity of contracts, etc (Section 393 of the Companies Act, 2013) :
Any failure by a company to comply with the provisions of Chapter XXII of the Companies Act, 2013, shall not affect the validity of any contract, dealing or transaction entered into by the company or its liability to be sued in respect thereof. However, the company shall not be entitled to bring any suit, claim any set-off, make any counter-claim or institute any legal proceeding in respect of any such contract, dealing or transaction, until the company has complied with the provisions of the Companies Act, 2013, applicable to it.
Some more information in Chapter XXII of the Companies Act, 2013
1. Action for improper use or description as foreign company: According to the Companies (Registration of Foreign Companies) Rules, 2014, if any person or persons trade or carry on business in any manner under any name or title or description as a foreign company registered under the Act or the rules made there under, that person or each of those persons shall, unless duly registered as foreign company under the Act and rules made there under, shall be liable for investigation under section 210 of the Companies Act, 2013 and action consequent upon that investigation shall be taken against that person.
2. The MCA vide General Circular No. 23/2014 dated 25.06.2014, has issued a clarification about the status of subsidiaries incorporated/to be incorporated by companies incorporated outside India, due to the absence of deeming provision of sub-section (7) of section 4 of the Companies Act, 1956 in the Companies Act, 2013.
Thus, in the light of the provisions of sections 2(68), 2(71) and 2(87) of the Companies Act, 2013, there is no bar in the Companies Act, 2013 for a company incorporated outside India to incorporate a subsidiary either as a public company or a private company. An existing company, being a subsidiary of a company incorporated outside India, registered under the Companies Act, 1956, either as private company or a public company by virtue of section 4(7) of the Companies Act, 1956 will continue as a private company or public company as the case may be, without any change in the incorporation status of such company.