New Corporate Laws Treatise: News Bulletin
Earlier MCA vide Notification No. S.O. 3677(E) dated 07.12.2016 and Notification No. G.S.R. 1134(E) dated 14.12.2016 notified several sections pertaining to inbound corporate restructuring and related Rules, however provisions for Cross Border Mergers under section 234 of the Companies Act, 2013 was left to be made effective and related Rules were to be specified specifically the jurisdictions to which cross border merger could be effected and the approval requirement from Reserve Bank of India.
MCA vide Notification No. S.O. (E) dated 13.04.2017 has now effected provisions of Cross Border Mergers under section 234 of the Companies Act, 2013.
The newly notified merger rules specifies as under:
In the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2017 after Rule 25, the following rule shall be inserted namely-
“25A. Merger or amalgamation of a foreign company with a Company and vice versa. –
(1) A foreign company incorporated outside India may merge with an Indian company after obtaining prior approval of Reserve Bank of India and after complying with the provisions of sections 230 to 232 of the Act and these rules.
(2) (a) A company may merge with a foreign company incorporated in any of the jurisdictions specified in Annexure B after obtaining prior approval of the Reserve Bank of India and after complying with provisions of sections 230 to 232 of the Act and these rules.
(b) The transferee company shall ensure that valuation is conducted by valuers who are members of a recognised professional body in the jurisdiction of the transferee company and further that such valuation is in accordance with internationally accepted principles on accounting and valuation. A declaration to this effect shall be attached with the application made to Reserve Bank of India for obtaining its approval under clause (a) of this sub-rule.
(3) The concerned company shall file an application before the Tribunal as per provisions of section 230 to section 232 of the Act and these rules after obtaining approvals specified in sub-rule (1) and sub-rule (2), as the case may be.
Explanation 1._ For the purposes of this rule the term “company” means a company as defined in clause (20) of section 2 of the Act and the term “foreign company” means a company or body corporate incorporated outside India whether having a place of business in India or not:
Explanation 2. For the purposes of this rule, it is clarified that no amendment shall be made in this rule without consultation of the Reserve Bank of India.”
Click here to view the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2017