Section 234: Merger or amalgamation of company with foreign company
This section is for mergers or amalgamations between Indian companies and foreign companies, outlining the applicable rules and approval requirements.
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What the section says
In plain terms
(1)The provisions of this Chapter unless otherwise provided under any other law for the time being in force, shall apply mutatis mutandis to schemes of mergers and amalgamations between companies registered under this Act and companies incorporated in the jurisdictions of such countries as may be notified from time to time by the Central Government:
The rules in this Chapter apply to mergers between Indian companies and companies from certain foreign countries notified by the Central Government, unless other laws say otherwise, and the Central Government can make additional rules with the Reserve Bank of India.
provisoProvided that the Central Government may make rules, in consultation with the Reserve Bank of India, in connection with mergers and amalgamations provided under this section.
(2)Subject to the provisions of any other law for the time being in force, a foreign company, may with the prior approval of the Reserve Bank of India, merge into a company registered under this Act or vice versa and the terms and conditions of the scheme of merger may provide, among other things, for the payment of consideration to the shareholders of the merging company in cash, or in Depository Receipts, or partly in cash and partly in Depository Receipts, as the case may be, as per the scheme to be drawn up for the purpose.
With the Reserve Bank of India's approval, a foreign company can merge with an Indian company, and the merger terms can include paying shareholders in cash, Depository Receipts, or a combination of both.
explanationExplanation.—For the purposes of sub-section (2), the expression “foreign company” means any company or body corporate incorporated outside India whether having a place of business in India or not.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.