Nikita Wilson
Asked February 10, 2017

Take over of company

  • 2 Answers
  • 804 Views

Can an Indian Private Limited Company take over an American LLC which is running on loss? What are the steps? An Indian and an American run the Indian Pvt Ltd Company and the same american is the sole owner of the American LLC that is to be taken up by the Indian Company. Kindly advise.

Answers 2

Sir

Yes an Indian Private Limited Company can take over the American LLC. So far so Indian Law is concerned, there is no embargo and RBI guidlines specifically permit overseas Direct Invesment i.e. taking over the shares of foreign company.

Regarding US Laws, certain states like Delaware etc. permit easy share transfer and taking over teh company. I have ties with US law firm and i also practice in US jurisdiction. I would require more details from you, in order to aptly answer your query.

Feel free to contact should you have any questions

 

Agree Comment 0 Agrees over 3 years ago

Dear Sir/madam,

The merger or an acquisition of such a nature gets covered under section 234 of the Companies Act, 2013 which talks about Merger or amalgamation of company with foreign company”.[1] It also suggests that the American LLC which is to be taken up by the Indian company needs to take a prior approval of the Reserve Bank of India and look into the payment of consideration to shareholders of merging company.

As far as the legal procedure while acquiring a company is concerned, it takes into consideration :-

  • notice to share holders and creditors
  • assets and liabilities
  • draft merger proposal
  • object clause
  • stock exchanges
  • shares and debentures
  •  

     

    [1] Subject to the provisions of any other law for the time being in force, a foreign company, may with the prior approval of the Reserve Bank of India, merge into a company registered under this Act or vice versa and the terms and conditions of the scheme of merger may provide, among other things, for the payment of consideration to the shareholders of the merging company in cash, or in Depository Receipts, or partly in cash and partly in Depository Receipts, as the case may be, as per the scheme to be drawn up for the purpose.

    Agree Comment 0 Agrees over 3 years ago

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