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

Kaveri Textiles Ltd (India) proposes to merge into Nordica Fabrics AS, a company incorporated outside India with no place of business in India. Under section 234, which view is correct about whether Nordica is a 'foreign company' for sub-section (2)?

Nordica is a foreign company. The Explanation to section 234(2) defines it as any company or body corporate incorporated outside India, whether or not it has a place of business in India. Registration with the Registrar or listing status is not a requirement.

  1. AIt is not a foreign company because it has no place of business in India
  2. BIt is a foreign company, because the expression covers any company or body corporate incorporated outside India whether or not it has a place of business in IndiaCorrect
  3. CIt is a foreign company only if it has registered with the Registrar of Companies
  4. DIt is a foreign company only if it is a listed entity

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. Hence the absence of an Indian place of business does not matter, and registration or listing is not required.

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