New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    What is "Flipping" in the context of

    entrepreneurship?
    A The process of selling a company's shares to an overseas entity Correct Answer Incorrect Answer
    B The process of transferring the entire ownership of an Indian company to an overseas entity Correct Answer Incorrect Answer
    C The process of acquiring an overseas company to expand business Correct Answer Incorrect Answer
    D The process of obtaining government support for start-ups Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    In the context of entrepreneurship, "Flipping" refers to the process of transferring the entire ownership of an Indian company to an overseas entity, accompanied by a transfer of all intellectual property (IP) and all data hitherto owned by the Indian company. It effectively transforms an Indian company into a 100% subsidiary of a foreign entity, with the founders and investors retaining the same ownership via the foreign entity, having swapped all shares. This process is typically driven by commercial, taxation and personal preferences of founders and investors. Hence, option B is correct.

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