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Sections 230 to 232 provide set of provisions,
which specially deal with the amalgamation of companies and provide procedures
through which the proposals of amalgamation, merger, reconstruction, compromise
and arrangement may be placed before the Tribunal for sanction.
which specially deal with the amalgamation of companies and provide procedures
through which the proposals of amalgamation, merger, reconstruction, compromise
and arrangement may be placed before the Tribunal for sanction.
Sections 230 to 232 are intended to be in the
nature of a system of single window clearance so that the parties are not put
to avoidable, unnecessary and cumbersome procedure of making separate
applications to the Tribunal for various other alterations or changes which
might be needed effectively to implement the sanctioned scheme whose overall
fairness and feasibility has been judged by the Tribunal.
nature of a system of single window clearance so that the parties are not put
to avoidable, unnecessary and cumbersome procedure of making separate
applications to the Tribunal for various other alterations or changes which
might be needed effectively to implement the sanctioned scheme whose overall
fairness and feasibility has been judged by the Tribunal.
Procedure
For Merger and Amalgamation Under Companies Act 2013
1. First step in this process
is to draft a scheme of compromise or arrangement for restructuring or amalgamation.
is to draft a scheme of compromise or arrangement for restructuring or amalgamation.
2. Conduct the
Board Meeting for considering the proposal of arrangement for restructuring or amalgamation and to approve the Scheme.
Board Meeting for considering the proposal of arrangement for restructuring or amalgamation and to approve the Scheme.
3. An application is to be
made to the Tribunal for direction to hold meetings of shareholders/creditors.
made to the Tribunal for direction to hold meetings of shareholders/creditors.
4. the Tribunal may on such application,
order a meeting of the creditors or class of creditors or the members or class
of members, as the case may be, to be called, held and conducted in such manner
as the Tribunal may direct.
order a meeting of the creditors or class of creditors or the members or class
of members, as the case may be, to be called, held and conducted in such manner
as the Tribunal may direct.
5. when an order has been made by the
Tribunal under sub-section (1), merging companies or the companies in respect
of which a division is proposed, shall also be required to circulate the
following for the meeting so ordered by the Tribunal, namely:—
Tribunal under sub-section (1), merging companies or the companies in respect
of which a division is proposed, shall also be required to circulate the
following for the meeting so ordered by the Tribunal, namely:—
(a) the draft of the proposed terms of the
scheme drawn up and adopted by the directors of the merging company;
scheme drawn up and adopted by the directors of the merging company;
(b) confirmation that a copy of the draft scheme has been filed with the Registrar;
(c) a report adopted by the directors of the merging companies explaining effect of
compromise on each class of shareholders, key managerial personnel, promotors
and non-promoter shareholders laying out in particular the share exchange
ratio, specifying any special valuation difficulties;
compromise on each class of shareholders, key managerial personnel, promotors
and non-promoter shareholders laying out in particular the share exchange
ratio, specifying any special valuation difficulties;
(d) the report of the expert with regard to valuation, if any;
(e) a supplementary accounting statement if
the last annual accounts of any of the merging company relate to a financial
year ending more than six months before the first meeting of the company
summoned for the purposes of approving the scheme.
the last annual accounts of any of the merging company relate to a financial
year ending more than six months before the first meeting of the company
summoned for the purposes of approving the scheme.
6. Hold the meeting of
shareholders/creditors as per the Tribunal order and Scheme of compromise or
arrangement must be approved by 3/4th in value of creditors, class of
creditors, members, class of members.
shareholders/creditors as per the Tribunal order and Scheme of compromise or
arrangement must be approved by 3/4th in value of creditors, class of
creditors, members, class of members.
7. Another application must be
made to the Tribunal sanctioning the scheme of compromise or arrangement.
made to the Tribunal sanctioning the scheme of compromise or arrangement.
8. Tribunal, after satisfying itself that
the specified procedure has been complied with, may, by order, sanction the
compromise or arrangement
the specified procedure has been complied with, may, by order, sanction the
compromise or arrangement
9. An approved scheme duly
sanctioned by the Tribunal is binding on all the shareholders /creditors / company
(ies).
sanctioned by the Tribunal is binding on all the shareholders /creditors / company
(ies).
10.
Every company in relation to which the
order is made shall cause a certified copy of the order to be filed with the
Registrar for registration within thirty days of the receipt of certified copy
of the order.
Every company in relation to which the
order is made shall cause a certified copy of the order to be filed with the
Registrar for registration within thirty days of the receipt of certified copy
of the order.
11. The scheme shall clearly indicate an
appointed date from which it shall be effective and the scheme shall be deemed
to be effective from such date and not at a date subsequent to the appointed
date.
appointed date from which it shall be effective and the scheme shall be deemed
to be effective from such date and not at a date subsequent to the appointed
date.
12. Every company in relation to which the
order is made shall, until the completion of the scheme, file a statement in
such form and within such time as may be prescribed with the Registrar every
year duly certified by a chartered accountant or a cost accountant or a company
secretary in practice indicating whether the scheme is being complied with in
accordance with the orders of the Tribunal or not.
order is made shall, until the completion of the scheme, file a statement in
such form and within such time as may be prescribed with the Registrar every
year duly certified by a chartered accountant or a cost accountant or a company
secretary in practice indicating whether the scheme is being complied with in
accordance with the orders of the Tribunal or not.
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