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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Mergers

Zenith Polymers Pvt Ltd, an Indian company, plans to merge into Orion Plastics Ltd, a company incorporated in a notified jurisdiction abroad, under a scheme governed by Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules. Which approval does section 234(2) of the Companies Act, 2013 require before the foreign company and the Indian company can merge?

The Reserve Bank of India's prior approval is required. Section 234(2) of the Companies Act, 2013 allows a foreign company to merge into an Indian company, or the reverse, only with the RBI's prior approval, 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
  3. CPrior approval of the Competition Commission of India only
  4. DPrior approval of the Registrar of Companies only

Explanation

Section 234(2) says a foreign company may, with the prior approval of the Reserve Bank of India, merge into an Indian company or vice versa. SEBI, CCI or the Registrar are not named as the approving authority in this provision.

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