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

A fast track scheme between Parent Ltd and its wholly-owned subsidiary Sub Ltd is registered by the Central Government under section 233(3). Sub Ltd is the transferor. Which statement correctly describes the effect of registration?

On registration, the transferor company is dissolved without winding-up, and its property and liabilities pass to the transferee company. Charges remain enforceable as if on the transferee's property, and pending legal proceedings continue by or against the transferee, so no abatement or lapse occurs.

  1. ASub Ltd is dissolved without process of winding-up and its property and liabilities become those of Parent LtdCorrect
  2. BSub Ltd must first be wound up by the Tribunal before dissolution
  3. CSub Ltd's pending legal proceedings abate on registration
  4. DCharges on Sub Ltd's property lapse on registration

Explanation

Section 233(8) deems registration to dissolve the transferor without winding-up. Section 233(9) transfers property and liabilities, keeps charges enforceable against the transferee's property, and continues pending proceedings by or against the transferee. So the other options contradict the section.

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