New Rules for Mergers: Foreign Holding Companies & Indian Subsidiaries Need RBI Approval, Compliance with Companies Act.

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Full Text of the Document

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....The notification amends the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 by inserting a new sub-rule (5) in rule 25A. It provides for the procedure to be followed in cases where a foreign holding company merges or amalgamates with its wholly owned Indian subsidiary company. The key requirements are: both companies must obtain prior approval from the Reserve Bank of India, the Indian transferee company must comply with Section 233 of the Companies Act, 2013, the application for merger/amalgamation must be made by the Indian transferee company to the Central Government u/s 233, and the declaration required under sub-rule (4) must be made at the time of making the application u/s 233. The amendment comes into force on 17th September, 2024.....