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

Meridian Ltd, a Singapore body corporate with no place of business in India, wishes to merge into Ganga Infra Ltd, an Indian company. Ganga's counsel argues Section 234(2) cannot apply because Meridian has no Indian place of business. Which is the best response?

The argument fails because the Explanation to Section 234 defines a foreign company as any company or body corporate incorporated outside India, whether or not it has a place of business in India. Meridian therefore qualifies, and the section covers mergers in either direction.

  1. ACorrect, because only foreign companies with an Indian place of business qualify
  2. BCorrect, because the body corporate must be registered under the Act
  3. CIncorrect, because Section 234 applies only to Indian transferor companies
  4. DIncorrect, because the Explanation defines foreign company as any company or body corporate incorporated outside India, whether or not it has a place of business in IndiaCorrect

Explanation

The Explanation to Section 234 defines foreign company for sub-section (2) as any company or body corporate incorporated outside India, whether having a place of business in India or not. Meridian qualifies. The section also covers merger in either direction, so the transferor-only view is wrong.

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