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

Under the Companies Act, 2013, a foreign company may merge into a company registered under the Act, or the reverse, subject to which requirement stated in Section 234?

Section 234(2) requires the prior approval of the Reserve Bank of India for a foreign company to merge into a company registered under the Companies Act, 2013, or the other way round, subject to any other law in force.

  1. APrior approval of the Reserve Bank of IndiaCorrect
  2. BPrior approval of the Securities and Exchange Board of India only
  3. CPrior approval of the Registrar of Companies in the foreign country
  4. DApproval of the Competition Commission of India only

Explanation

Section 234(2) provides that, subject to other laws, a foreign company may merge into an Indian-registered company or vice versa with the prior approval of the Reserve Bank of India. The other bodies are not named in this provision as the approving authority, so SEBI alone or CCI alone is wrong.

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