Provisions enabling cross-border mergers notified

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On 13 April, the Ministry of Corporate Affairs notified section 234 of the Companies Act, 2013, which governs cross-border mergers. It also notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2017, making necessary changes to give effect to section 234 of the act.

Provisions enabling cross-border mergers notifiedSection 234 states that chapter XV of the act will apply mutatis mutandis to inbound and outbound cross-border mergers. Outbound mergers are subject to the host jurisdiction of the foreign company permitting such schemes with an Indian company. The section envisages a scheme of amalgamation, providing for payment either by cash or in the form of depository receipts. However, it is subject to approval by the Reserve Bank of India (RBI), National Company Law Tribunal and other regulatory authorities.

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The business law digest is compiled by Nishith Desai Associates (NDA). NDA is a research-based international law firm with offices in Mumbai, New Delhi, Bengaluru, Singapore, Silicon Valley and Munich. It specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.

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