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CMA Final · Corporate and Economic Laws · Compromises, Arrangements and Amalgamations

Under Section 234(2), the scheme of merger between a foreign company and an Indian company may provide for payment of consideration to the shareholders of the merging company in which form?

Section 234(2) permits consideration to the merging company's shareholders in cash, in Depository Receipts, or partly in cash and partly in Depository Receipts, as the scheme provides. It is not restricted to one form.

  1. AOnly in cash
  2. BOnly in Depository Receipts
  3. CCash, Depository Receipts, or partly cash and partly Depository ReceiptsCorrect
  4. DOnly in equity shares of the foreign company

Explanation

Section 234(2) allows consideration in cash, in Depository Receipts, or partly in cash and partly in Depository Receipts as per the scheme. Restricting it to a single form is wrong, and equity shares are not named.

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