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

Sagar Textiles Ltd, an Indian company, plans a scheme of merger with Kestrel Ltd, registered in country Y. Counsel notes that Section 234(1) applies the merger provisions of the Chapter mutatis mutandis to schemes with companies in certain jurisdictions. Which condition must be met for Section 234(1) to apply to country Y?

Section 234(1) applies only to companies incorporated in countries notified from time to time by the Central Government. The Chapter's provisions then apply mutatis mutandis, and rules on such mergers are made in consultation with the Reserve Bank of India.

  1. ACountry Y must be a member of the Reserve Bank of India's approved list of lenders
  2. BCountry Y must be notified by the Central Government from time to timeCorrect
  3. CKestrel Ltd must have a place of business in India
  4. DCountry Y must have enacted a law identical to the Companies Act, 2013

Explanation

Section 234(1) applies to companies incorporated in jurisdictions of such countries as may be notified from time to time by the Central Government. No identical-law requirement or Indian place of business is stated. The Central Government may make rules in consultation with the RBI.

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