MCA on April 14, 2017 has notified Section 234 of Companies Act, 2013 and issued rules thereunder, thus paving way for merger and amalgamation of a foreign entity with an Indian entity and vice-versa.
What is the new Rule 25A about?
- Mandatory Prior Approval from RBI for a foreign company incorporated outside India, to merge with an Indian entity. Provisions of Section 230-232 and rules thereunder shall also have to be complied with.
- An Indian company may merge with a foreign company incorporated under specified under certain jurisdictions (or to say friendly countries in terms of law and order); and after obtaining prior approval of RBI and compliance with provisions of Section 230-232 of Companies Act, 2013.
- Thereafter, an application needs to be made to NCLT accordingly for merger of the respective entities.
(The above article has been compiled by CS Reema Jain)