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

Kaveri Tech Ltd (India) is being merged with Alpine GmbH, incorporated in Germany, which has no place of business in India. A director argues that Section 234(2) cannot apply because Alpine has no Indian presence. Is the director correct?

The director is wrong. The Explanation to Section 234(2) defines a foreign company as any company or body corporate incorporated outside India, whether or not it has a place of business in India. Alpine GmbH therefore qualifies despite having no Indian presence.

  1. AYes, because only foreign companies with a place of business in India qualify
  2. BYes, because Section 234(2) covers only companies incorporated in the Commonwealth
  3. CNo, because foreign company means any body corporate incorporated outside India, whether or not it has a place of business in IndiaCorrect
  4. DNo, because a foreign company must first be registered with the Registrar under this Act

Explanation

The Explanation to Section 234(2) defines foreign company as any company or body corporate incorporated outside India whether having a place of business in India or not. Alpine therefore qualifies. The other options add conditions absent from the text.

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