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CS Professional · Corporate Restructuring, Valuation and Insolvency · Types of Corporate Restructuring

Mehta Textiles Ltd is incorporated in India. Its promoters want to merge it into Orion Fabrics Ltd, a body corporate incorporated in a country that has not been notified by the Central Government. Orion has no place of business in India. What is the correct position based on Section 234(1)?

The section's route applies only to companies incorporated in jurisdictions of countries notified by the Central Government. Because Orion's country is not notified, Section 234(1) does not cover this merger. Having or lacking a place of business in India does not change that.

  1. AThe Chapter's provisions apply to mergers only with companies incorporated in jurisdictions notified by the Central GovernmentCorrect
  2. BThe Chapter applies automatically to every foreign body corporate
  3. CThe merger is valid if Orion has a place of business in India, whether or not notified
  4. DRBI approval alone is sufficient for any foreign jurisdiction

Explanation

Section 234(1) applies the Chapter mutatis mutandis to schemes between Indian-registered companies and companies incorporated in jurisdictions of countries notified by the Central Government. Orion's jurisdiction is not notified, so the section's route is not available. Place of business is irrelevant under the Explanation, and RBI approval does not replace notification.

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