CA Inter P1 · Chapter 7 · Question 4 of 8
Which of the following is NOT a condition for an amalgamation to be classified as an 'amalgamation in the nature of merger' under AS 14?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Shareholders holding at least 75% of the equity shares of the transferor company become shareholders of the transferee company
Explanation
AS 14 requires, among other conditions, that shareholders holding not less than 90% of the face value of the equity shares of the transferor company (other than shares already held by the transferee or its subsidiaries) become equity shareholders of the transferee company. A 75% threshold is not the AS 14 condition. The other options are genuine conditions for a merger.
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