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

Kaveri Pharma Ltd (India) plans a scheme with Nordic AB, incorporated in Sweden, which has no place of business in India. Nordic AB's counsel argues it is not a 'foreign company' for Section 234(2) as it has no Indian presence. What is the correct position?

Nordic AB is a foreign company. The Explanation to Section 234 covers any company or body corporate incorporated outside India, whether or not it has a place of business in India, so lack of an Indian presence is irrelevant.

  1. AIt is a foreign company only if it has a place of business in India
  2. BIt is a foreign company only if the Central Government has notified Sweden
  3. CIt is a foreign company because the Explanation covers any body corporate incorporated outside India, whether or not it has a place of business in IndiaCorrect
  4. DIt is a foreign company only if it is registered with the Registrar of Companies

Explanation

The Explanation to Section 234 defines foreign company as any company or body corporate incorporated outside India, whether having a place of business in India or not. The notification of countries relates to sub-section (1), not the definition in sub-section (2).

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