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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 vice versa, only with the prior approval of which authority?

The prior approval of the Reserve Bank of India is required. Section 234(2) permits a foreign company to merge into an Indian-registered company, or the reverse, only with RBI approval, subject to other laws in force. SEBI, the Registrar and the Tribunal alone are not named in that sub-section.

  1. AThe Securities and Exchange Board of India
  2. BThe Reserve Bank of IndiaCorrect
  3. CThe National Company Law Tribunal alone
  4. DThe Registrar of Companies

Explanation

Section 234(2) states that a foreign company may, subject to any other law, merge into an Indian-registered company or vice versa with the prior approval of the Reserve Bank of India. SEBI, the NCLT or the Registrar are not named as the approving authority in this sub-section, so the NCLT-only option is wrong.

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