Section 234 of CA 2013 : Section 234: Merger Or Amalgamation Of Company With Foreign Company

Explanation using Example

Imagine a scenario where 'TechGlobal Ltd.', a company incorporated and registered in India under the Companies Act, 2013, is looking to merge with 'InnoWeb Corp.', a tech company incorporated in Singapore. As per Section 234 of the Companies Act, 2013, the merger between these two companies is possible subject to certain conditions.

First, the merger must comply with the provisions of Chapter XV (Compromises, Arrangements and Amalgamations) of the Companies Act, 2013, as well as any rules notified by the Central Government specifically for international mergers. Additionally, since 'InnoWeb Corp.' is a foreign company, the merger scheme would require prior approval from the Reserve Bank of India (RBI).

Once all legal requirements are met, including the approval from RBI, 'TechGlobal Ltd.' may either merge into 'InnoWeb Corp.' or vice versa. The terms of the merger might include payment to the shareholders of 'TechGlobal Ltd.' in cash, or in Depository Receipts, or a combination of both, depending on the agreed scheme.