{"id":5992,"date":"2020-04-03T10:30:16","date_gmt":"2020-04-03T05:00:16","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=5992"},"modified":"2022-11-16T14:36:43","modified_gmt":"2022-11-16T09:06:43","slug":"merger-or-amalgamation-of-company-with-foreign-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/merger-or-amalgamation-of-company-with-foreign-company\/","title":{"rendered":"Merger or Amalgamation of Company with Foreign Company: Complete Overview"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The businesses in these modern economics days are very different from the businesses earlier. The increase in the adaption of the technology is challenging the business operating these days. Due to the increasing wave of globalization, the concept of Merger and Amalgamation with Foreign Company has now gained significant importance in recent times. Under the <strong><em>Companies Act, 2013<\/em><\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/companies-act\/companies-act-2013.html\"><strong>[1]<\/strong><\/a><\/sup>, the provisions for Merger or Amalgamation of Company are provided in Section 234 of the Act. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/merger-or-amalgamation-of-company-with-foreign-company\/#What_is_a_Merger_or_Amalgamation_of_Company_with_Foreign_Company\" >What is a Merger or Amalgamation of Company with\nForeign Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/merger-or-amalgamation-of-company-with-foreign-company\/#What_legal_provisions_are_associated_with_the_Merger_or_Amalgamation_of_Company_with_Foreign_Company\" >What legal provisions are associated with the Merger\nor Amalgamation of Company with Foreign Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/merger-or-amalgamation-of-company-with-foreign-company\/#What_are_the_conditions_for_Merger_or_Amalgamation_of_Company_with_Foreign_Company\" >What are the conditions for Merger or Amalgamation of\nCompany with Foreign Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/merger-or-amalgamation-of-company-with-foreign-company\/#What_are_the_different_types_of_Merger_or_Amalgamation_of_the_Company_with_Foreign_Company\" >What are the different types of Merger or Amalgamation\nof the Company with Foreign Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/merger-or-amalgamation-of-company-with-foreign-company\/#What_are_the_key_provisions_of_the_Merger_or_Amalgamation_for_Inbound_and_Outbound_Merger\" >What are the key provisions of the Merger or\nAmalgamation for Inbound and Outbound Merger?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/merger-or-amalgamation-of-company-with-foreign-company\/#What_are_the_benefits_of_the_Merger_or_Amalgamation_of_Company_with_Foreign_Company\" >What are the benefits of the Merger or Amalgamation of\nCompany with Foreign Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/merger-or-amalgamation-of-company-with-foreign-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Merger_or_Amalgamation_of_Company_with_Foreign_Company\"><\/span>What is a Merger or Amalgamation of Company with\nForeign Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Merger or Amalgamation of Company with Foreign Company or Cross Border <a href=\"https:\/\/corpbiz.io\/mergers-and-acquisitions\"><strong>Mergers and Acquisition<\/strong><\/a> is a concept when one Company acquires another Company that is based in a different country. The Merger or Amalgamation of a Company with Foreign Company helps the Companies to expand their businesses around the world. A Company must have a clear strategy or vision before the Merger or Amalgamation with Foreign Company. The company should also do the Due Diligence analysis to find the perfect match of a foreign company for the process of Merger or Amalgamation with Foreign Company to start.<\/p>\n\n\n\n<p><strong><em>Under\nSection 234 of Companies Act, 2013,<\/em><\/strong>\nprovides for the provisions for Merger or Amalgamation of Company with Foreign\nCompany. The prior approval of RBI is needed for Merger or Amalgamation with\nForeign Company as per <strong><em>Rule 25A of Companies (Compromises, Arrangement,\nand Amalgamation) Rules, 2017<\/em><\/strong>, in consultation with the Reserve Bank of\nIndia (RBI). The RBI also introduced the <strong><em>Foreign Exchange Management\n(Cross Border Merger) Regulations, 2017,<\/em><\/strong> which states that the Merger\nor Amalgamation with Foreign Company must be approved by the Reserve Bank of\nIndia (RBI) if the Merger or Amalgamation is in accordance of the\nregulations.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_legal_provisions_are_associated_with_the_Merger_or_Amalgamation_of_Company_with_Foreign_Company\"><\/span>What legal provisions are associated with the Merger\nor Amalgamation of Company with Foreign Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>In India, the Merger or Amalgamation Foreign Company is majorly regulated under the following legal provisions:<\/em><\/strong><\/p>\n\n\n\n<ul><li>The Companies\nAct, 2013.<\/li><li>SEBI (Listing\nObligation &amp; Disclosure Requirements), 2015<\/li><li>SEBI (Substantial\nAcquisition of Share and Takeover) Regulations, 2011.<\/li><li>The Competition\nAct, 2002.<\/li><li>Indian Stamp\nAct, 1899, and all other Stamp Acts.<\/li><li>Insolvency and\nBankruptcy Code, 2016.<\/li><li>Foreign Exchange\nManagement (Cross Border Mergers) Regulations, 2018.<\/li><li>Central Goods\nand Services Act, 2017, and other State GST Acts.<\/li><li>Companies\n(Compromises, Arrangement, and Amalgamation) Rules, 2017.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_conditions_for_Merger_or_Amalgamation_of_Company_with_Foreign_Company\"><\/span>What are the conditions for Merger or Amalgamation of\nCompany with Foreign Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The\nconditions for Merger or Amalgamation of the Company with Foreign Company are\nas follows:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Prior approval is needed by Reserve Bank of India (RBI)<\/li><li>The provisions of <strong><em>Section 230-232 of Companies Act, 2013<\/em><\/strong>, should be followed for the Merger or Amalgamation with Foreign Company;<\/li><li>Approval of National Company Law Tribunal (NCLT), Shareholders, Creditors, Securities and Exchange Board of India (SEBI), and Income Tax Authorities should be taken prior the Merger or Amalgamation with Foreign Company;<\/li><li>Payment of consideration to shareholders of merging company should be provided in cash or depository receipts or partly in depository receipts and partly in cash;<\/li><li>The Incorporation of Foreign Companies should be in a permitted jurisdiction.<\/li><li>The Valuation of the surviving should be submitted to the Reserve Bank of India (RBI);<\/li><li>The Valuation should be done in accordance with the internationally accepted principles on Accounting and Valuation. The Valuation report should be made by a valuer who is the member of a recognized body in its jurisdiction.<\/li><li>The Resultant Company is involved in the Merger, or Amalgamation is required to furnish a report from time to time as per guidelines of Reserve Bank of India (RBI). The company should also consult the Government of India while preparing the report.<\/li><li>The laws relating to the Merger or Amalgamation of the Foreign Company in which Foreign Company is incorporated should also be considered by the NCLT while approving the Merger or Amalgamation of Company with Foreign Company. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_different_types_of_Merger_or_Amalgamation_of_the_Company_with_Foreign_Company\"><\/span>What are the different types of Merger or Amalgamation\nof the Company with Foreign Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The Merger or Amalgamation with Foreign Company are of two types:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"576\" height=\"338\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-10.png\" alt=\"Types of Amalgamation of the Company with Foreign Company\" class=\"wp-image-5993\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-10.png 576w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-10-300x176.png 300w\" sizes=\"(max-width: 576px) 100vw, 576px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Inbound Merger<\/h3>\n\n\n\n<p>The\nInbound Merger is a concept where the resultant company is an Indian Company.\nThe Resultant Company means that company that takeover the assets and liabilities\nof the other company involved in the Merger or Amalgamation of Company with\nForeign Company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Outbound Merger<\/h3>\n\n\n\n<p>The Outbound Merger is a concept where the Resultant Company is a foreign company. The Resultant Company means that company takeovers the assets and liabilities of the other company involved in the Merger of Company with Foreign Company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_key_provisions_of_the_Merger_or_Amalgamation_for_Inbound_and_Outbound_Merger\"><\/span>What are the key provisions of the Merger or\nAmalgamation for Inbound and Outbound Merger?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The key provisions of Merger or Amalgamation in case of Inbound Merger and Outbound Merger is as follows:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"670\" height=\"381\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-11.png\" alt=\"key provisions of the Merger for Inbound and Outbound Merger\" class=\"wp-image-5995\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-11.png 670w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-11-300x171.png 300w\" sizes=\"(max-width: 670px) 100vw, 670px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Issuance of Securities<\/h3>\n\n\n\n<p>The\nResultant Company can do the Issue of Securities to a person resident outside\nIndia according to <strong><em>Foreign Exchange Management (Transfer or Issue of\nSecurities by a Person Resident outside India) (Amendment) Regulations, 2019<\/em><\/strong>.&nbsp; <\/p>\n\n\n\n<p>The\nResultant Company, if holding any assets after the Merger, shall follow the <strong><em>Foreign\nExchange Management (Transfer or Issue of any Foreign Security) Regulation,\n2004<\/em><\/strong>. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Valuation<\/h3>\n\n\n\n<p>As\nper the Rule 25A of the Companies (Compromises, Arrangement, and Amalgamation)\nRules, 2017, the Valuation should be done by registered valuers who are members\nof recognized bodies in the jurisdiction of the transferee Company. Furthermore,\nthe Valuation should be done in accordance with the international standard\naccepted principles of Valuation and Accounting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Vesting of Assets and Liabilities &nbsp;&nbsp;&nbsp;&nbsp;<\/h3>\n\n\n\n<p>In\nthe case of Inbound Merger, the borrowings and guarantees of transferor Company\nshould become the borrowings and guarantees of Resultant Company. On the other hand,\nthe borrowings and guarantees of the Resultant Company undergoing Outbound\nMerger should be paid as per the NCLT Regulations.<\/p>\n\n\n\n<p>In\nInbound Merger, the Resultant Company can open a Bank Account in the\njurisdiction of a foreign country for overseeing the transactions related to\nthe Merger or Amalgamation of Company with Foreign Company. On the other hand,\nin case of Outbound Merger, the Resultant Company can open a Bank Account Special\nNon-Resident Rupee Account for the transactions related to Merger or Amalgamation\nof Company with Foreign Company. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_benefits_of_the_Merger_or_Amalgamation_of_Company_with_Foreign_Company\"><\/span>What are the benefits of the Merger or Amalgamation of\nCompany with Foreign Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The benefits are as follows:<\/em><\/strong><\/p>\n\n\n\n<ul><li>The Merger or\nAmalgamation helps in <strong><em>capital accumulation<\/em><\/strong> for a long term\nbasis.&nbsp; <\/li><li>There is <strong><em>employment\ncreation<\/em><\/strong> in the long run when the business expands and becomes\nsuccessful.<\/li><li>There will be\nsharing of <strong><em>best management skills and practices<\/em><\/strong> when Companies\nacross the world come together in business. <\/li><li>There will be <strong><em>an\nexpansion of technology<\/em><\/strong> when best skills and practices come together in\nbusiness from around the different countries of the world. <\/li><li><strong><em>There will\nbe an increase in the productivity<\/em><\/strong>\nof the host country. <\/li><li>If the\ngovernment policies are in favor of the Merger or Amalgamation, then it will\nlead to <strong><em>economic growth and development<\/em><\/strong> of the country. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Section 234 of the Companies Act, 2013, provides for the Merger or Amalgamation of Company with Foreign Company.<\/em><\/strong> The Companies Act, 2013, provides the much-needed procedure for upgrading the Merger or Amalgamation architecture in India. The Merger or Amalgamation with Foreign Company is done on a very vast scale these days in India. The complex issues in Merger or Amalgamation with Foreign Company depend largely and specifically upon the facts, scale, dynamics, and geographic scope of both the Companies. Hence, the process of Merger or Amalgamation of Company with Foreign Company is complicated and time-consuming. We at <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> have expert professionals to help you with the process. Our professionals will assist and help you with the process of Merger of Company with Foreign Company. Our professionals will ensure successful and timely completion of the process.&nbsp;<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/analysis-on-mergers-and-acquisitions-online-in-india\/\">Mergers and Acquisitions: SWOT Analysis<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The businesses in these modern economics days are very different from the businesses earlier. The increase in the adaption of the technology is challenging the business operating these days. Due to the increasing wave of globalization, the concept of Merger and Amalgamation with Foreign Company has now gained significant importance in recent times. Under the [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":6000,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[451],"tags":[450],"acf":{"service_id":"295"},"authorName":"Sakshi Sharda","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/sakshi-sharda.jpg","authorDescription":"Sakshi Sharda has done BBALLB(HONS) and holds a strong knowledge on the matters pertaining to finance and law. From the past one year she is working as a legal advisor and in her leisure time she works on improvising her knowledge. Sakshi is spreading her knowledge by writing for Corpbiz.","postViews":25060,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5992"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=5992"}],"version-history":[{"count":27,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5992\/revisions"}],"predecessor-version":[{"id":50747,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5992\/revisions\/50747"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/6000"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=5992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=5992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=5992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}