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

Himalaya Foods Ltd, an Indian company, plans to merge with Nordic Foods AS. Nordic is incorporated in a country that the Central Government has not notified, though it has a place of business in India. Based on Section 234 of the Companies Act, 2013, which statement is most accurate?

Non-notification is a hurdle. Section 234(1) applies the merger provisions to companies in jurisdictions notified by the Central Government. Whether the foreign company has a place of business in India is irrelevant, because the Explanation covers foreign companies with or without one.

  1. ASection 234(1) applies Chapter provisions to mergers with companies of notified jurisdictions, so non-notified status of Nordic's country is a hurdle under that sub-sectionCorrect
  2. BSection 234 applies to every foreign company, regardless of notification, only because it has a place of business in India
  3. CSection 234 applies only to foreign companies without any place of business in India
  4. DNotification matters only for the consideration, not for the scheme

Explanation

Section 234(1) applies the merger Chapter mutatis mutandis to mergers with companies incorporated in jurisdictions notified by the Central Government. Section 234(2) defines foreign company to include those with or without a place of business in India, so having an Indian place of business neither creates nor removes the notification requirement. Hence the non-notified country is a hurdle.

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