The amalgamated company has to issue new shares to Non-resident Indians in amalgamation and for that it has to obtain permission of Reserve Bank of India under the provisions of the Foreign Exchange Management (FEMA) Act
CS Professional · Corporate Restructuring, Valuation and Insolvency · PYQS · June 2017
The amalgamated company has to issue new shares to Non-resident Indians in amalgamation and for that it has to obtain permission of Reserve Bank of India under the provisions of the Foreign Exchange Management (FEMA) Act, 1998. Examine and explain the statement citing relevant provisions of laws.
Answer & Explanation:
When a scheme of amalgamation envisages issue of shares/cash option to non-resident Indians, the amalgamated company is required to obtain the permission of Reserve Bank of India, subject to conditions prescribed under the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000.
Topics: Amalgamation
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