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

Bharat Textiles Ltd, an Indian company registered under the Companies Act, 2013, proposes to merge into a company incorporated in a country that the Central Government has notified for this purpose. Which statement correctly reflects Section 234 on the application of the merger provisions of the Act?

The merger provisions apply mutatis mutandis to schemes between Indian companies and companies incorporated in countries notified by the Central Government, unless another law provides otherwise. Notification of the jurisdiction is the condition, not the foreign company's place of business in India.

  1. AThe Chapter's provisions apply mutatis mutandis to such a scheme, unless another law provides otherwiseCorrect
  2. BThe Chapter does not apply at all to any scheme involving a foreign company
  3. CThe Chapter applies to a merger with a company from any country, whether or not notified
  4. DThe Chapter applies only if the foreign company has a place of business in India

Explanation

Section 234(1) applies the Chapter mutatis mutandis to schemes between Indian-registered companies and companies incorporated in jurisdictions notified by the Central Government, unless another law provides otherwise. Notification of the country is therefore essential, which rules out the 'any country' option. A place of business in India is not the test.

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