MCA vide notification dated April 13, 2017 has amended the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. As per the amendment a new Rule 25A has been inserted which talks about Merger or Amalgamation of a Foreign Company with a Company and Vice- Versa. As per the new Rule:

  • A Foreign Company incorporated outside India may merge with an Indian Company after obtaining prior approval of Reserve Bank of India (“RBI”) and after complying with the provisions of Section 230 to 232 of the Companies Act, 2016.
  • A Company may merge with a Foreign Company incorporated in any of the jurisdictions specified in Annexure B of the Rules after obtaining prior approval of the RBI and after complying with the provisions of Section 230 to 232 of the Companies Act, 2016.
  • The transferee Company shall ensure that valuation is conducted by valuers who members of a recognized 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 RBI for obtaining its approval.
  • The concerned Company shall file an application before the Tribunal as per the provisions of Section 230 to 232 of the Companies Act, 2016 after obtaining the approvals from RBI.

The amendment shall come into force from April 13, 2017.