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

A fast track scheme between Ravi Ltd (transferor) and its holding company Mehta Ltd (transferee) is registered under section 233. Which statement about the consequences is correct?

Registration dissolves the transferor company without winding-up, and pending legal proceedings by or against it continue by or against the transferee company. Charges on its property remain enforceable as if on the transferee's property, under section 233(8) and (9).

  1. ARavi Ltd is dissolved without process of winding-up, and pending legal proceedings by or against it continue by or against Mehta LtdCorrect
  2. BRavi Ltd must be wound up by the Tribunal after registration
  3. CPending legal proceedings against Ravi Ltd abate on registration
  4. DCharges on Ravi Ltd's property are extinguished on registration

Explanation

Section 233(8) deems registration to dissolve the transferor without winding-up, and section 233(9) provides that charges remain enforceable on the transferee's property and pending proceedings continue by or against the transferee. Abatement or extinguishment is therefore wrong.

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