Background:
Section 234 of the Companies Act, 2013, along with Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, outlines the provisions and requirements for compromises, arrangements, and amalgamations. Mergers involving a foreign holding company incorporated outside India and an Indian company must adhere to the provisions specified in Sections 230 to 232 of the 2013 Act.
Amendments:
MCA amended Rule 25A to simplify the procedure for mergers and amalgamations involving foreign holding company incorporated outside India (transferor) and an Indian wholly owned subsidiary (transferee).
Following are the new provisions introduced:
Effective date: The revised amendments shall come into force form the 17th of September 2024.
SW Point of View: The amendment brings more clarity and procedural requirements for cross-border mergers involving foreign holding companies and their Indian subsidiaries, these changes are likely to encourage cross-border investments while maintaining necessary oversight. Overall, this marks a positive step towards facilitating smoother international business transactions in India. |
Sahil V Ojha, Audit, SW India