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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Mergers

Arjun Exports Pvt Ltd (India) wants to merge with Nordic Trade AS, a company incorporated in a country that the Central Government has not notified, with RBI approval already obtained. A director argues that RBI approval alone suffices. What is the position under the Companies Act, 2013?

RBI approval alone is not enough. Section 234(1) applies the merger Chapter to schemes with companies from jurisdictions notified by the Central Government. Approval of the Reserve Bank is a separate requirement and cannot replace notification of the foreign company's country.

  1. ASection 234(1) applies the Chapter's scheme provisions only to companies in notified jurisdictions, so RBI approval alone does not make the scheme operate under that sub-sectionCorrect
  2. BAny foreign country qualifies once RBI approves
  3. CThe Registrar can notify the country on a case basis
  4. DNotification is needed only for mergers where the Indian company is the transferor

Explanation

Section 234(1) applies the Chapter mutatis mutandis to schemes with companies incorporated in jurisdictions notified by the Central Government. RBI approval is a separate requirement under sub-section (2), not a substitute for notification of the jurisdiction.

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