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CS Professional · Corporate Restructuring, Valuation and Insolvency · Documentation - Merger and Amalgamation

Which description correctly captures the scope of Section 240 of the Companies Act, 2013?

Section 240 covers offences committed under the Companies Act, 2013 by officers in default of the transferor company before its merger, amalgamation or acquisition. Their liability continues afterwards. It is not limited to amalgamations or to offences discovered later.

  1. AIt covers offences under any law committed by any employee of the transferee company
  2. BIt covers offences under this Act committed by officers in default of the transferor company before the merger, amalgamation or acquisitionCorrect
  3. CIt covers only offences discovered by the Registrar after the merger takes effect
  4. DIt applies only to amalgamations and not to mergers or acquisitions

Explanation

The section refers to liability in respect of offences committed under this Act by the officers in default of the transferor company prior to its merger, amalgamation or acquisition. It is limited to offences under this Act and to the transferor's officers, and it covers all three events named.

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