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CS Professional · Corporate Restructuring, Valuation and Insolvency · Fast Track Mergers

A fast track merger of Lotus Retail Ltd (transferor) into its holding company Lotus Holdings Ltd is registered by the Central Government under Section 233(3). What is the effect of this registration on Lotus Retail Ltd?

Lotus Retail Ltd stands dissolved without any process of winding-up. Section 233(8) provides that registration of the scheme under sub-section (3) or (7) has this effect. No liquidator is appointed and no separate Tribunal order of dissolution is required.

  1. AIt continues as a separate entity until its liquidator is appointed
  2. BIt is dissolved without the process of winding-upCorrect
  3. CIt is converted into a division of the transferee company that retains its own name and registration
  4. DIt is struck off only after the Tribunal passes a dissolution order

Explanation

Section 233(8) states that registration of the scheme under sub-section (3) or (7) has the effect of dissolution of the transferor company without process of winding-up. No liquidator or separate Tribunal dissolution order is needed.

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