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

Under a Section 234 scheme, a foreign company merges into Indian company Sagar Ltd, and the foreign company's shareholders are to receive consideration. Which form of consideration does Section 234(2) expressly mention?

Section 234(2) expressly permits consideration to the merging company's shareholders in cash, in Depository Receipts, or partly in cash and partly in Depository Receipts, as per the scheme. It does not limit payment to cash alone or name debentures or equity shares.

  1. AOnly equity shares of the transferee company
  2. BCash, Depository Receipts, or partly cash and partly Depository ReceiptsCorrect
  3. COnly secured debentures of the transferee company
  4. DOnly cash, with no other form permitted

Explanation

Section 234(2) states that the scheme's terms may provide for payment to shareholders of the merging company in cash, in Depository Receipts, or partly in cash and partly in Depository Receipts. It does not restrict consideration to cash alone, and it does not name equity shares or debentures.

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