Procedural aspects and process of amalgamation

1. RASU SHARMARASU SHARMA
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[phone]
Procedural aspects and process of
amalgamation between two Private
Limited Companies
- A Court Based Restructuring

2. RASU SHARMA
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Meaning of AmalgamationMeaning of Amalgamation
Reasons for AmalgamationReasons for Amalgamation
Governing Statutes (Overview of Legal Provisions)Governing Statutes (Overview of Legal Provisions)
Legal Due diligence before AmalgamationLegal Due diligence before Amalgamation
List of forms under Companies (Court) Rules, 1959List of forms under Companies (Court) Rules, 1959
Authorities involved in AmalgamationAuthorities involved in Amalgamation
Number of Meetings for AmalgamationNumber of Meetings for Amalgamation
Documentation in AmalgamationDocumentation in Amalgamation
Steps for AmalgamationSteps for Amalgamation
FLOW OF PRESENTATIONFLOW OF PRESENTATION

3. RASU SHARMA
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•Amalgamation is a legal process by which two or more Amalgamation is a legal process by which two or more
companies joined together to form a new entity or one or companies joined together to form a new entity or one or
more companies are to be absorbed or blended with another more companies are to be absorbed or blended with another
and as a consequence the amalgamating company loses its and as a consequence the amalgamating company loses its
existence and its shareholders become the shareholders of existence and its shareholders become the shareholders of
new company or the amalgamated company.new company or the amalgamated company.
Meaning of AmalgamationMeaning of Amalgamation
A Pvt. A Pvt.
Ltd.Ltd.
B Pvt. B Pvt.
Ltd.Ltd.
C Pvt. C Pvt.
Ltd.Ltd.
A Pvt. A Pvt.
Ltd.Ltd.
B Pvt. B Pvt.
Ltd.Ltd.
A Pvt. A Pvt.
Ltd.Ltd.
OROR

4. RASU SHARMA
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•The shareholders of amalgamating companies get shares of The shareholders of amalgamating companies get shares of
amalgamated company. The shareholders of each amalgamated company. The shareholders of each
amalgamating company become the shareholders in the amalgamating company become the shareholders in the
amalgamated company.amalgamated company.
•Therefore, the essence of amalgamation is to make an Therefore, the essence of amalgamation is to make an
arrangement thereby uniting the undertakings of two or more arrangement thereby uniting the undertakings of two or more
companies so that they become vested in, or under the companies so that they become vested in, or under the
control of one company which may or may not be the original control of one company which may or may not be the original
of the two or more of such uniting companies.of the two or more of such uniting companies.
Meaning of AmalgamationMeaning of Amalgamation

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•The companies going into liquidation or merged companies The companies going into liquidation or merged companies
are called vendor companies or transferor companies. The are called vendor companies or transferor companies. The
new company which is formed to take over the liquidated new company which is formed to take over the liquidated
companies or the company with which the transferor companies or the company with which the transferor
company is merged is called transferee or vendee.company is merged is called transferee or vendee.
•In the case of amalgamation the assets and liabilities of In the case of amalgamation the assets and liabilities of
transferor company(s) are amalgamated and the transferee transferor company(s) are amalgamated and the transferee
company becomes vested with all such assets and liabilities.company becomes vested with all such assets and liabilities.
Meaning of AmalgamationMeaning of Amalgamation

6. RASU SHARMA
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•It is interesting to note that the Companies Act, 1956 and It is interesting to note that the Companies Act, 1956 and
also the Companies Act, 2013, have not defined the term also the Companies Act, 2013, have not defined the term
‘amalgamation’. ‘amalgamation’.
•However Section 2(1B) of the Income Tax Act, 1961 defines However Section 2(1B) of the Income Tax Act, 1961 defines
‘amalgamation’ as follows:‘amalgamation’ as follows:
““Amalgamation in relation to companies, means the merger of Amalgamation in relation to companies, means the merger of
one or more companies with another company or the merger one or more companies with another company or the merger
of two or more companies to form one company (the company of two or more companies to form one company (the company
or companies which so merge being referred to as or companies which so merge being referred to as
amalgamating company or companies and the company with amalgamating company or companies and the company with
which they merge or which is formed as result of the merger, which they merge or which is formed as result of the merger,
as the amalgamated company), in such a manner that:as the amalgamated company), in such a manner that:--
Meaning of AmalgamationMeaning of Amalgamation

7. RASU SHARMA
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(i) (i) all the property of the amalgamating company or all the property of the amalgamating company or
companies immediately before the amalgamation companies immediately before the amalgamation
becomes the property of the amalgamated company becomes the property of the amalgamated company
by virtue of the amalgamation;by virtue of the amalgamation;
(ii)(ii)all the liabilities of the amalgamating company or all the liabilities of the amalgamating company or
companies immediately before the amalgamation companies immediately before the amalgamation
become the liabilities of the amalgamated company become the liabilities of the amalgamated company
by virtue of the amalgamation;by virtue of the amalgamation;
(iii)(iii)shareholders holding not less than three-fourth in shareholders holding not less than three-fourth in
value of the shares in the amalgamating company or value of the shares in the amalgamating company or
companies (other than shares already held therein companies (other than shares already held therein
immediately before the amalgamation by or by a immediately before the amalgamation by or by a
nominee for, the amalgamated company or it nominee for, the amalgamated company or it
subsidiary) become shareholders of the subsidiary) become shareholders of the
amalgamated company by virtue of the amalgamated company by virtue of the
amalgamation,amalgamation,
Meaning of AmalgamationMeaning of Amalgamation

8. RASU SHARMA
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otherwise than as a result of the acquisition of the otherwise than as a result of the acquisition of the
property of one company by another company pursuant property of one company by another company pursuant
to the purchase of such property by the other company to the purchase of such property by the other company
or as a result of the distribution of such property to the or as a result of the distribution of such property to the
other company after the winding up of the first other company after the winding up of the first
mentioned company.”mentioned company.”
Thus, a merger to qualify as an ‘amalgamation’ for the Thus, a merger to qualify as an ‘amalgamation’ for the
purpose of the Income Tax Act, the above three purpose of the Income Tax Act, the above three
conditions have to be satisfied.conditions have to be satisfied.
Meaning of AmalgamationMeaning of Amalgamation

9. RASU SHARMA
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•The Amalgamation must form part of the business and The Amalgamation must form part of the business and
corporate strategies aimed at creating sustainable corporate strategies aimed at creating sustainable
competitive advantage for the firm. Mergers and competitive advantage for the firm. Mergers and
amalgamations are strategic decisions leading to the amalgamations are strategic decisions leading to the
maximisation of a company’s growth.maximisation of a company’s growth.
•Mergers and amalgamations are usually intended to achieve Mergers and amalgamations are usually intended to achieve
any or some or all of the following purposes:any or some or all of the following purposes:
1.1.Synergistic operational advantagesSynergistic operational advantages – – Coming together to Coming together to
produce a new or enhanced effect compared to separate produce a new or enhanced effect compared to separate
effects.effects.
2.2.Reduction in production, administrative, selling, legal and Reduction in production, administrative, selling, legal and
professional expenses.professional expenses.
Reasons for AmalgamationReasons for Amalgamation

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3.3.Economies of scale (scale effect)Economies of scale (scale effect) – – Reduction in the Reduction in the
average cost of production and increase the production average cost of production and increase the production
so that products can be offered at more competitive price so that products can be offered at more competitive price
to capture a large market share.to capture a large market share.
4.4.Benefits of integrationBenefits of integration – – Combining two or more Combining two or more
companies under the same control for their mutual companies under the same control for their mutual
benefit by reducing competition, saving costs by benefit by reducing competition, saving costs by
reducing overheads, capturing a larger market share, reducing overheads, capturing a larger market share,
pooling technical or financial resources, cooperating on pooling technical or financial resources, cooperating on
research and development, etc.research and development, etc.
5.5.Optimum use of capacities and factors of production.Optimum use of capacities and factors of production.
Reasons for AmalgamationReasons for Amalgamation

11. RASU SHARMA
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6.6.Tax advantagesTax advantages –– Carry forward and set off of losses of a Carry forward and set off of losses of a
loss-making amalgamating company against profits of a loss-making amalgamating company against profits of a
profit-making amalgamated company, e.g. Section 72A of profit-making amalgamated company, e.g. Section 72A of
the Income-Tax Act, 1961.the Income-Tax Act, 1961.
7.7.To Avoid Financial constraints for expansionTo Avoid Financial constraints for expansion – – A A
company which has the capacity to expand but cannot company which has the capacity to expand but cannot
do so due to financial constraints may opt for merging do so due to financial constraints may opt for merging
into another company which can provide funds for into another company which can provide funds for
expansion.expansion.
8.8.Strengthening financial strength.Strengthening financial strength.
9.9.Diversification.Diversification.
Reasons for AmalgamationReasons for Amalgamation

12. RASU SHARMA
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10.10.Advantage of brand-equity.Advantage of brand-equity.
11.11.Loss of objectives with which several companies were set Loss of objectives with which several companies were set
up as independent entities.up as independent entities.
12.12.Survival and Sustaining growth.Survival and Sustaining growth.
13.13.Competitive advantageCompetitive advantage – – The factors that give a company The factors that give a company
an advantage over its rivals.an advantage over its rivals.
14.14.Eliminating or weakening competition.Eliminating or weakening competition.
15.15.Revival of a weak or sick company.Revival of a weak or sick company.
16.16.Accelerating company’s market power and reducing the Accelerating company’s market power and reducing the
severity of competition.severity of competition.
Reasons for AmalgamationReasons for Amalgamation

13. RASU SHARMA
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The process of Amalgamation is governed by the following The process of Amalgamation is governed by the following
Statutes:Statutes:
1.1. Companies Act, 1956:Companies Act, 1956: Chapter V containing Sections Chapter V containing Sections
390 to 396A of the Companies Act, 1956 is a complete code in 390 to 396A of the Companies Act, 1956 is a complete code in
itself. It provides for the law and procedure to be complied with itself. It provides for the law and procedure to be complied with
by the companies for compromises, arrangements and by the companies for compromises, arrangements and
reconstruction.reconstruction.

2.2. Companies (Court) Rules, 1959:Companies (Court) Rules, 1959: Rules 67 to 87 of the Rules 67 to 87 of the
Companies (Court) Rules, 1959 lay down the court procedure Companies (Court) Rules, 1959 lay down the court procedure
for the approval of schemes.for the approval of schemes.
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)

14. RASU SHARMA
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3.3.Companies Act, 2013:Companies Act, 2013: The new Companies Act, 2013 The new Companies Act, 2013
contains the provisions regarding Compromises, contains the provisions regarding Compromises,
Arrangements and Amalgamations under Chapter XV Arrangements and Amalgamations under Chapter XV
from Section 230 to Section 240. Under the new Act an from Section 230 to Section 240. Under the new Act an
Indian company can merge with any foreign company Indian company can merge with any foreign company
whether having a place of business in India or not. It is whether having a place of business in India or not. It is
pertinent to note here that earlier under the Companies pertinent to note here that earlier under the Companies
Act, 1956 there was no such provisions regarding merger Act, 1956 there was no such provisions regarding merger
of an Indian company with any foreign company outside of an Indian company with any foreign company outside
India. The Act also contains provisions regarding fast India. The Act also contains provisions regarding fast
track and simplified procedure for mergers and track and simplified procedure for mergers and
amalgamations of certain class of companies such as amalgamations of certain class of companies such as
holding and subsidiary, and small companies under holding and subsidiary, and small companies under
section 233.section 233.
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)

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Gist of Chapter XV of the Companies Act, 2013 :Gist of Chapter XV of the Companies Act, 2013 :
COMPROMISES, ARRANGEMENTS AND AMALGAMATIONSCOMPROMISES, ARRANGEMENTS AND AMALGAMATIONS
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)
Section No.Subject headings
230 Power to compromise or make arrangements with
creditors and members
231 Power of Tribunal to enforce compromise or
arrangement
232 Merger and amalgamation of companies
233 Merger or amalgamation of certain companies
234 Merger or amalgamation of company with foreign
company
235 Power to acquire shares of shareholders dissenting
from scheme or contract approved by majority

16. RASU SHARMA
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Gist of Chapter XV of the Companies Act, 2013 :Gist of Chapter XV of the Companies Act, 2013 :
COMPROMISES, ARRANGEMENTS AND AMALGAMATIONSCOMPROMISES, ARRANGEMENTS AND AMALGAMATIONS
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)
Section No.Subject headings
236 Purchase of minority shareholding
237 Power of Central Government to provide for
amalgamation of companies in public interest
238 Registration of offer of schemes involving transfer of
shares
239 Preservation of books and papers of amalgamated
companies
240 Liability of officers in respect of offences committed
prior to merger, amalgamation, etc.

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4.4.Draft Companies (Compromises, Arrangements and Draft Companies (Compromises, Arrangements and
Amalgamations) Rules, 2016:Amalgamations) Rules, 2016: The Central Government The Central Government
through Ministry of Corporate Affairs has also issued through Ministry of Corporate Affairs has also issued
draft Rules on Compromises, Arrangements and draft Rules on Compromises, Arrangements and
Amalgamations. These rules provide for procedures in Amalgamations. These rules provide for procedures in
Compromises, Arrangements and Amalgamations under Compromises, Arrangements and Amalgamations under
the Companies Act, 2013.the Companies Act, 2013.
5.5.Income Tax Act, 1961:Income Tax Act, 1961: Sections 35(5), 35A(6), 35E(7), Sections 35(5), 35A(6), 35E(7),
41(4) Explanation 2, 43(1) Explanation 7, 43(6) 41(4) Explanation 2, 43(1) Explanation 7, 43(6)
Explanation 2, 43C, 47 (vi) & (vii), 49(1)(iii)(e), 49(2), and Explanation 2, 43C, 47 (vi) & (vii), 49(1)(iii)(e), 49(2), and
72A of Income Tax Act provides tax benefits in case of 72A of Income Tax Act provides tax benefits in case of
merger and amalgamation.merger and amalgamation.
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)

18. RASU SHARMA
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6.6.Accounting Standard-14:Accounting Standard-14: The Institute of Chartered The Institute of Chartered
Accountants of India has introduced Accounting Accountants of India has introduced Accounting
Standard -14 (AS 14) on ‘Accounting for Amalgamations’. Standard -14 (AS 14) on ‘Accounting for Amalgamations’.
The standard recognizes two types of amalgamation –The standard recognizes two types of amalgamation –
(i)(i)Amalgamation in the nature of merger; and Amalgamation in the nature of merger; and
(ii)(ii)Amalgamation in the nature of purchase.Amalgamation in the nature of purchase.
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)

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7.7.FEMA, 1999:FEMA, 1999: Where the scheme of amalgamation Where the scheme of amalgamation
envisages issue of shares/cash option to Non-Resident envisages issue of shares/cash option to Non-Resident
Indians (NRIs), the amalgamated company is required to Indians (NRIs), the amalgamated company is required to
obtain the permission of Reserve Bank of India. obtain the permission of Reserve Bank of India.
Regulation 7 of the Foreign Exchange Management Regulation 7 of the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident (Transfer or Issue of Security by a Person Resident
outside India) Regulations, 2000 contains provisions outside India) Regulations, 2000 contains provisions
regarding issue of shares to NRIs under a scheme of regarding issue of shares to NRIs under a scheme of
amalgamation.amalgamation.
8.8.Competition Act, 2002:Competition Act, 2002: Regulation of combinations as Regulation of combinations as
provided under Sections 5 and 6 of the Competition Act provided under Sections 5 and 6 of the Competition Act
is also required to be complied by companies, if is also required to be complied by companies, if
applicable.applicable.
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)

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9.9.Indian Stamp Act:Indian Stamp Act: Indian Stamp Act provides for Indian Stamp Act provides for
payment of stamp duty. In amalgamation of companies payment of stamp duty. In amalgamation of companies
following types of stamp duty is levied:-following types of stamp duty is levied:-
(i) (i) Stamp duty on the Court Order: Stamp duty on the Court Order: The order of the Court under The order of the Court under
Section 394 of the Companies Act, 1956 requiring the transfer Section 394 of the Companies Act, 1956 requiring the transfer
of assets and liabilities of the transferor company to the of assets and liabilities of the transferor company to the
transferee company is a conveyance and hence chargeable to transferee company is a conveyance and hence chargeable to
stamp duty.stamp duty.
(ii) (ii) Stamp duty on the other documents: Stamp duty on the other documents: Usually in an Usually in an
amalgamation of companies, several other documents, amalgamation of companies, several other documents,
agreements, indemnity bonds are executed, depending upon agreements, indemnity bonds are executed, depending upon
the facts of each case and requirements of the parties. Stamp the facts of each case and requirements of the parties. Stamp
duty would also be leviable on such documents, agreements, duty would also be leviable on such documents, agreements,
indemnity bonds, as per the nature of the instrument and its indemnity bonds, as per the nature of the instrument and its
contents.contents.
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)

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10.10.CENVAT Credit Rules, 2004:CENVAT Credit Rules, 2004: Indian Rule 10 of the CENVAT Indian Rule 10 of the CENVAT
Credit Rules, 2004 deals with the transfer of credit. It provides Credit Rules, 2004 deals with the transfer of credit. It provides
that if a manufacturer of the final product shifts his factory to that if a manufacturer of the final product shifts his factory to
another site or the factory is transferred on account of change another site or the factory is transferred on account of change
in ownership or on account of sale, merger, amalgamation, in ownership or on account of sale, merger, amalgamation,
lease or transfer of the factory to a joint venture with the lease or transfer of the factory to a joint venture with the
specific provision for transfer of liabilities of such factory, then specific provision for transfer of liabilities of such factory, then
the manufacturer shall be allowed to transfer the CENVAT the manufacturer shall be allowed to transfer the CENVAT
credit lying unutilized in his accounts to such transferred, credit lying unutilized in his accounts to such transferred,
sold, merged, leased or amalgamated factory. Further, if a sold, merged, leased or amalgamated factory. Further, if a
provider of output service shifts or transfers his business on provider of output service shifts or transfers his business on
account of change in ownership or on account of sale, merger, account of change in ownership or on account of sale, merger,
amalgamation, lease or transfer of the business to a joint amalgamation, lease or transfer of the business to a joint
venture with the specific provision for transfer of liabilities of venture with the specific provision for transfer of liabilities of
such business, then, the provider of output service shall be such business, then, the provider of output service shall be
allowed to transfer the CENVAT credit lying unutilized in his allowed to transfer the CENVAT credit lying unutilized in his
account to such transferred, sold, merged, leased or account to such transferred, sold, merged, leased or
amalgamated business.amalgamated business.
Governing Statutes (Overview Governing Statutes (Overview
of Legal Provisions)of Legal Provisions)

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•Before Amalgamation, the Transferee Company should have Before Amalgamation, the Transferee Company should have
a legal due diligence in the affairs of the Transferor a legal due diligence in the affairs of the Transferor
Company(ies). Company(ies).
•A Legal due diligence is undertaken to achieve the following A Legal due diligence is undertaken to achieve the following
objectives:objectives:
1.1.To assess the impact of likely results of current and To assess the impact of likely results of current and
potentially pending litigation and result of recently potentially pending litigation and result of recently
concluded litigation,concluded litigation,
2. To ensure that the subject company has complied with the 2. To ensure that the subject company has complied with the
provisions of all the relevant statutes and there would be no provisions of all the relevant statutes and there would be no
potential liability on account of non compliance,potential liability on account of non compliance,
Legal Due diligence Checklist Legal Due diligence Checklist
before Amalgamationbefore Amalgamation

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3. To assess the current and anticipated future impact of 3. To assess the current and anticipated future impact of
government regulations on the entity's cost level.government regulations on the entity's cost level.
The information to be collected in Legal Due Diligence The information to be collected in Legal Due Diligence
includes:includes:
• • Names and addresses of the company's attorneysNames and addresses of the company's attorneys
• • Is a discussion with them appropriate, warranted?Is a discussion with them appropriate, warranted?
• • Make inquiries of the company's management and Make inquiries of the company's management and
attorney regarding possible lawsuits, contract problems, attorney regarding possible lawsuits, contract problems,
etc.etc.
• • Does the Company have good legal records? If not, why Does the Company have good legal records? If not, why
not? Assess the implications.not? Assess the implications.
• • Make inquiries of the company's management and legal Make inquiries of the company's management and legal
concerning the likelihood of an unfavorable law suits. concerning the likelihood of an unfavorable law suits.
Assess the implications to the extent there might be legal Assess the implications to the extent there might be legal
problems, the company's investment risk might be problems, the company's investment risk might be
significantly higher.significantly higher.
Legal Due diligence Checklist Legal Due diligence Checklist
before Amalgamationbefore Amalgamation

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•There are various forms which are required to be filled up There are various forms which are required to be filled up
for the purpose of fulfilling all the requirements applicable for the purpose of fulfilling all the requirements applicable
for filing applications / petition relating to Amalgamation. for filing applications / petition relating to Amalgamation.
•The details of all these forms are given under the Companies The details of all these forms are given under the Companies
(Court) Rules, 1959. Below is the list of such applicable (Court) Rules, 1959. Below is the list of such applicable
forms:forms:
List of forms under Companies List of forms under Companies
(Court) Rules, 1959(Court) Rules, 1959
Form No.Form No. PurposePurpose
Form 33 Summons for Directions to Convene a Meeting under
section 391
Form 34 Affidavit in Support of Summons
Form 35 Order on Summons for Directions

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List of forms under Companies List of forms under Companies
(Court) Rules, 1959(Court) Rules, 1959
Form No.Form No. PurposePurpose
Form 36 Notice convening Meeting
Form 37 Form of Proxy
Form 38 Advertisement of the Notice Convening Meeting of
Creditors/shareholder, etc.
Form 39 Report by Chairman
Form 40 Petition to sanction compromise or arrangement
Form 41 Order on petition
Form 42 Order under section 394

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There are number of authorities and persons involved as There are number of authorities and persons involved as
required by the statute and specialized nature of activity to be required by the statute and specialized nature of activity to be
carried out. The tasks categorized in stages like framing, carried out. The tasks categorized in stages like framing,
sanctioning and implementation of the scheme of amalgamation sanctioning and implementation of the scheme of amalgamation
among such authorities. among such authorities.
These authorities and persons involved are categorized under These authorities and persons involved are categorized under
the following heads:the following heads:
1.1.Judiciary;Judiciary;
2.2.Government; andGovernment; and
3. Professionals.3. Professionals.
Authorities involved in Authorities involved in
AmalgamationAmalgamation

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1.1.Judiciary:Judiciary:
••High Court of the State where Registered Offices of High Court of the State where Registered Offices of
Companies involved in Amalgamation are situated.Companies involved in Amalgamation are situated.
2.2.Government Authority:Government Authority:
••Registrar of Companies/ Company Law BoardRegistrar of Companies/ Company Law Board
••Official LiquidatorsOfficial Liquidators
••Regional DirectorRegional Director
••Central GovernmentCentral Government
••Authorities under respective statutes whose permission / Authorities under respective statutes whose permission /
approval is required in the course of Amalgamation.approval is required in the course of Amalgamation.
Authorities involved in Authorities involved in
AmalgamationAmalgamation

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3.3.Professionals:Professionals:
••AdvocatesAdvocates
••Chartered AccountantsChartered Accountants
••Company SecretariesCompany Secretaries
••Merchant BankerMerchant Banker
••CounselorsCounselors
••Venture CapitalistsVenture Capitalists
••Financial institutionsFinancial institutions
Authorities involved in Authorities involved in
AmalgamationAmalgamation

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There are number of meetings required to be convened before There are number of meetings required to be convened before
and after the Amalgamation. Below are the meetings required to and after the Amalgamation. Below are the meetings required to
be convened:be convened:
BOARD MEETINGSBOARD MEETINGS
1st Board Meeting:1st Board Meeting: The Company (both transferor and The Company (both transferor and
transferee) should convene a board meeting and pass the transferee) should convene a board meeting and pass the
following resolutions in that meeting:following resolutions in that meeting:
•• Approval of the proposal for Amalgamation.Approval of the proposal for Amalgamation.
•• Appoint valuers, lawyers, solicitors & consultants Appoint valuers, lawyers, solicitors & consultants
etc.etc.
•• Obtain due diligence certificate, if required.Obtain due diligence certificate, if required.
Number of Meetings for Number of Meetings for
AmalgamationAmalgamation

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BOARD MEETINGSBOARD MEETINGS
2nd Board Meeting:2nd Board Meeting: Once the Companies get the draft scheme Once the Companies get the draft scheme
of Amalgamation, board should convene another board meeting of Amalgamation, board should convene another board meeting
& get the following resolutions approved:& get the following resolutions approved:
•• Approval of Draft Scheme of AmalgamationApproval of Draft Scheme of Amalgamation
•• Approval of Exchange Ratio & Appointed DateApproval of Exchange Ratio & Appointed Date
•• Appointment of Counsel to make representation Appointment of Counsel to make representation
in High in High CourtCourt
•• Authorizing one Director / Officer to sign Authorizing one Director / Officer to sign
Petition / Petition / Application on behalf of the CompanyApplication on behalf of the Company
Number of Meetings for Number of Meetings for
AmalgamationAmalgamation

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BOARD MEETINGSBOARD MEETINGS
3rd Board Meeting:3rd Board Meeting: The board of the transferee Company The board of the transferee Company
should take steps to call extraordinary general meeting (EGM) to should take steps to call extraordinary general meeting (EGM) to
approve the following:approve the following:
•• Allotment of shares to other than present Allotment of shares to other than present
shareholders shareholders in terms of Section 62 of the Companies Act, in terms of Section 62 of the Companies Act,
2013 2013 (earlier Sec 81(1A) of the Companies Act, 1956).(earlier Sec 81(1A) of the Companies Act, 1956).
•• Increase in share capital or change in capital Increase in share capital or change in capital
structure structure of authorized capital, if required.of authorized capital, if required.
•• Change in Object Clause or Name Clause of the Change in Object Clause or Name Clause of the
MOA, if MOA, if required.required.
Number of Meetings for Number of Meetings for
AmalgamationAmalgamation

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BOARD MEETINGSBOARD MEETINGS
4th Board Meeting:4th Board Meeting: Once all concerned approves proposed Once all concerned approves proposed
Amalgamation, the Companies should take Amalgamation on Amalgamation, the Companies should take Amalgamation on
record and also complete all the formalities, as this will be the record and also complete all the formalities, as this will be the
last board meeting in the case of Transferor Company. Following last board meeting in the case of Transferor Company. Following
are the steps to be taken:are the steps to be taken:
•• In case of Transferor Company:In case of Transferor Company: The board The board
approves approves accounts. accounts.
•• In case of Transferee Company: In case of Transferee Company: In case of In case of
Transferee Transferee Company the board should pass resolution Company the board should pass resolution
making making allotment of shares to the shareholders of the allotment of shares to the shareholders of the
Transferor Transferor Company(ies) as per the swap ratio.Company(ies) as per the swap ratio.
Number of Meetings for Number of Meetings for
AmalgamationAmalgamation

33. RASU SHARMA
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SHAREHOLDERS’ MEETINGSHAREHOLDERS’ MEETING
•If the Honorable High Court directs to the Companies If the Honorable High Court directs to the Companies
(Transferor & Transferee) proposing Amalgamation, to call (Transferor & Transferee) proposing Amalgamation, to call
shareholders’ meeting, then said meeting should be called as shareholders’ meeting, then said meeting should be called as
per the direction of the Court after getting approved all the per the direction of the Court after getting approved all the
documents by the Court documents by the Court i.e.i.e. mode of service of notice, quorum, mode of service of notice, quorum,
venue & time, appointment of chairman, name of paper in venue & time, appointment of chairman, name of paper in
which the notice of meeting was published.which the notice of meeting was published.
Number of Meetings for Number of Meetings for
AmalgamationAmalgamation

34. RASU SHARMA
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SHAREHOLDERS’ MEETINGSHAREHOLDERS’ MEETING
•Here Special Resolution should be passed to approve the Here Special Resolution should be passed to approve the
Amalgamation (it may be noted that approval has to be in full Amalgamation (it may be noted that approval has to be in full
and cannot be approved in part) and voting is by way of ballot and cannot be approved in part) and voting is by way of ballot
and for approval 75% in value terms and 51% in number terms and for approval 75% in value terms and 51% in number terms
should vote in favor of the resolution.should vote in favor of the resolution.
•At the meeting, question answer session should be conducted At the meeting, question answer session should be conducted
& conduct the voting for the resolution of the approval of the & conduct the voting for the resolution of the approval of the
scheme & get the special resolution passed.scheme & get the special resolution passed.
Number of Meetings for Number of Meetings for
AmalgamationAmalgamation

35. RASU SHARMA
[email protected]
SHAREHOLDERS’ MEETINGSHAREHOLDERS’ MEETING
Transferee Company Transferee Company may conduct any other Extra-ordinary may conduct any other Extra-ordinary
General Meeting to approve the following:General Meeting to approve the following:
•Increase in share capital or change in capital structure of Increase in share capital or change in capital structure of
authorized capital.authorized capital.
•Special resolution authorizing director for issuing shares other Special resolution authorizing director for issuing shares other
than existing shareholders.than existing shareholders.
Number of Meetings for Number of Meetings for
AmalgamationAmalgamation

36. RASU SHARMA
[email protected]
MEETING OF CREDITORS OF COMPANIESMEETING OF CREDITORS OF COMPANIES
If the Honorable High Court directs to the companies If the Honorable High Court directs to the companies
(Transferor & Transferee) proposing Amalgamation to call (Transferor & Transferee) proposing Amalgamation to call
meeting of the Secured & Unsecured Creditors, then said meeting of the Secured & Unsecured Creditors, then said
meeting should be called as per the direction of the Court after meeting should be called as per the direction of the Court after
getting all the documents approved by the Court getting all the documents approved by the Court i.e.i.e.
•mode of service of notice, mode of service of notice,
•quorum, quorum,
•venue & time, venue & time,
•appointment of chairman, appointment of chairman,
•name of paper in which the notice of meeting was published. name of paper in which the notice of meeting was published.
Number of Meetings for Number of Meetings for
AmalgamationAmalgamation

37. RASU SHARMA
[email protected]
The documentation in Amalgamation can be divided into two The documentation in Amalgamation can be divided into two
parts parts viz.viz.
(A) (A) Documents required for Statutory RequirementsDocuments required for Statutory Requirements
(B) (B) Documents required by various PartiesDocuments required by various Parties
Documentation in Documentation in
AmalgamationAmalgamation

38. RASU SHARMA
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(A) Documents required for Statutory Requirements(A) Documents required for Statutory Requirements
1.1. Scheme of Amalgamation:Scheme of Amalgamation: The Scheme of The Scheme of
Amalgamation is basically a contract between two companies Amalgamation is basically a contract between two companies
and the basis of the whole restructuring process. The scheme and the basis of the whole restructuring process. The scheme
has to be submitted to all authorities with other documents has to be submitted to all authorities with other documents
required.required.
Clauses of the Scheme of AmalgamationClauses of the Scheme of Amalgamation :: A Scheme normally A Scheme normally
contains the following clauses:contains the following clauses:
•• Definition ClauseDefinition Clause providing definitions of Transferor and providing definitions of Transferor and
Transferee Company, Transferee Company, Appointed date, Effective date, Appointed date, Effective date,
Undertaking etc.Undertaking etc.
Documentation in Documentation in
AmalgamationAmalgamation

39. RASU SHARMA
[email protected]
(A)(A)Documents required for Statutory RequirementsDocuments required for Statutory Requirements
•• Share Capital ClauseShare Capital Clause giving details of share capital of giving details of share capital of
both the Companies.both the Companies.
•• Assets and Liabilities ClauseAssets and Liabilities Clause giving details of assets and giving details of assets and
liabilities getting transferred.liabilities getting transferred.
• • Clause giving details of Clause giving details of Consideration Consideration to be discharged & to be discharged &
Exchange RatioExchange Ratio..
• • Clause giving details of obligations / liabilities under Clause giving details of obligations / liabilities under
Contracts, Deeds, Bonds, Trade marks & other instruments Contracts, Deeds, Bonds, Trade marks & other instruments
getting transferred.getting transferred.
Documentation in Documentation in
AmalgamationAmalgamation

40. RASU SHARMA
[email protected]
(A)(A)Documents required for Statutory RequirementsDocuments required for Statutory Requirements
• • Pending Legal proceedings.Pending Legal proceedings.
• • Treatment of reserves in the books of Transferee Company.Treatment of reserves in the books of Transferee Company.
• • Restrictions on Transferor Company to do business until Restrictions on Transferor Company to do business until
the Effective Date.the Effective Date.
• • Clause giving details of:Clause giving details of:
(a) (a) operative date of the scheme;operative date of the scheme;
(b) (b) provisions for Transferor Company's staff, provisions for Transferor Company's staff,
workmen and workmen and employees and terms of their employment in employees and terms of their employment in
Transferee Transferee Company.Company.
•• Scheme should provide for continuity of service of Scheme should provide for continuity of service of
employees of Transferor Company and terms should not be less employees of Transferor Company and terms should not be less
favorable than their existing terms of employmentfavorable than their existing terms of employment
Documentation in Documentation in
AmalgamationAmalgamation

41. RASU SHARMA
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(A)(A)Documents required for Statutory RequirementsDocuments required for Statutory Requirements
• • Clause giving details of:Clause giving details of:
(a) (a) Expenses incurred to be borne by which Expenses incurred to be borne by which
CompanyCompany
(b) (b) Any other details required to be disclosed with Any other details required to be disclosed with
the the scheme.scheme.
(c) (c) Some special information relating to the schemeSome special information relating to the scheme
Documentation in Documentation in
AmalgamationAmalgamation

42. RASU SHARMA
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(A) Documents required for Statutory Requirements(A) Documents required for Statutory Requirements
2.2. Application:Application: The All the companies involved are The All the companies involved are
required to make an application to the High required to make an application to the High Court to Court to
obtain directions for holding meetings of various shareholders & obtain directions for holding meetings of various shareholders &
creditors or dispensation thereof for approval of the scheme. The creditors or dispensation thereof for approval of the scheme. The
format of the Application is given in format of the Application is given in Form No 33 Form No 33 of the of the
Company (Court) Rules, 1959.Company (Court) Rules, 1959.
Contents of the ApplicationContents of the Application : : The application contains the The application contains the
following:following:
• • Name of the Transferor/Transferee CompanyName of the Transferor/Transferee Company
• • Name of DirectorsName of Directors
• • Share capital – (Authorized, Issued and Paid up)Share capital – (Authorized, Issued and Paid up)
Documentation in Documentation in
AmalgamationAmalgamation

43. RASU SHARMA
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(A) Documents required for Statutory Requirements(A) Documents required for Statutory Requirements
• • Address of Registered OfficeAddress of Registered Office
• • Date of incorporationDate of incorporation
• • Date of commencement of businessDate of commencement of business
• • Latest Audited Balance Sheet (as Annexure)Latest Audited Balance Sheet (as Annexure)
• • Scheme of arrangement with creditorsScheme of arrangement with creditors
• • Copy of scheme of Amalgamation (as Annexure)Copy of scheme of Amalgamation (as Annexure)
• • Prayer for holding meetings of shareholders and Prayer for holding meetings of shareholders and
creditorscreditors
•• The Companies may also pray for not holding the The Companies may also pray for not holding the
meeting of shareholders / creditors, as the case may be, if all meeting of shareholders / creditors, as the case may be, if all
such shareholders/creditors have given their NOC for such such shareholders/creditors have given their NOC for such
Amalgamation.Amalgamation.
Documentation in Documentation in
AmalgamationAmalgamation

44. RASU SHARMA
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(A) Documents required for Statutory Requirements(A) Documents required for Statutory Requirements
3.3. Court's Order on Application:Court's Order on Application: The High Court to which The High Court to which
application is made for seeking application is made for seeking permission to file the permission to file the
petition passes an order either allowing or rejecting the petition passes an order either allowing or rejecting the
application. The format of Order is given in application. The format of Order is given in Form No 35Form No 35..
Contents of the OrderContents of the Order: : The Court’s order shall contain the The Court’s order shall contain the
following:following:
• • That the MOA of the Companies involved has That the MOA of the Companies involved has
Amalgamation as an Object.Amalgamation as an Object.
• • That Scheme of Amalgamation has been That Scheme of Amalgamation has been
approved by the approved by the Board of Directors of respective Board of Directors of respective
Companies & Companies & Advertisement of the same has been given.Advertisement of the same has been given.
Documentation in Documentation in
AmalgamationAmalgamation

45. RASU SHARMA
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(A) Documents required for Statutory Requirements(A) Documents required for Statutory Requirements
• • That Prayer has been made for the transfer of That Prayer has been made for the transfer of
specific specific assets.assets.
• • That parties have informed the Court about the That parties have informed the Court about the
consideration of transfer.consideration of transfer.
• • That confirmations of Scheme have been taken That confirmations of Scheme have been taken
considering the interests of all the shareholders, the considering the interests of all the shareholders, the
members, creditors etc.members, creditors etc.
• • That Prayer for dispensation of meeting is made That Prayer for dispensation of meeting is made
(if (if confirmation from shareholders, secured / unsecured confirmation from shareholders, secured / unsecured
creditors has already been taken); orcreditors has already been taken); or
Documentation in Documentation in
AmalgamationAmalgamation

46. RASU SHARMA
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(A) Documents required for Statutory Requirements(A) Documents required for Statutory Requirements
• • Conveying the meeting of different class of Conveying the meeting of different class of
shareholders/creditors;shareholders/creditors;
• • Decide upon the time, place, and chairperson of the Decide upon the time, place, and chairperson of the
meeting;meeting;
• • Publication of notices in two languages. One in Publication of notices in two languages. One in
English & English & the other in a vernacular language & also in the the other in a vernacular language & also in the
Govt. Govt. Gazette.Gazette.
Documentation in Documentation in
AmalgamationAmalgamation

47. RASU SHARMA
[email protected]
(A) Documents required for Statutory Requirements(A) Documents required for Statutory Requirements
4.4. Petition:Petition: After complying with various directions issued After complying with various directions issued
by the Honorable High Court, and after the scheme is approved by the Honorable High Court, and after the scheme is approved
by all of the concerned parties, the Companies are required to by all of the concerned parties, the Companies are required to
file petition to the Court. This petition is in Form No 40.file petition to the Court. This petition is in Form No 40.
Contents of the PetitionContents of the Petition: : The contents of the petition are as The contents of the petition are as
follows:follows:
• • Appointed DateAppointed Date
• • Registered OfficeRegistered Office
• • Date of incorporationDate of incorporation
• • Share Capital - Authorized, Issued and Paid upShare Capital - Authorized, Issued and Paid up
• • Objects of the Petitioner Company(ies)Objects of the Petitioner Company(ies)
Documentation in Documentation in
AmalgamationAmalgamation

48. RASU SHARMA
[email protected]
(A) Documents required for Statutory Requirements(A) Documents required for Statutory Requirements
• • Appointed DateAppointed Date
• • Details of shareholders and creditors meetings Details of shareholders and creditors meetings
heldheld
• • Prayer for sanctioning the schemePrayer for sanctioning the scheme
• • Copy of Memorandum and Articles of Association of Copy of Memorandum and Articles of Association of
Transferor and Transferee Companies Transferor and Transferee Companies
• • Copy of Audited Accounts of Transferor and Copy of Audited Accounts of Transferor and
Transferee Transferee Companies Companies
• • Scheme of amalgamationScheme of amalgamation
• • Copy of Chairman's ReportCopy of Chairman's Report
Documentation in Documentation in
AmalgamationAmalgamation

49. RASU SHARMA
[email protected]
(B) Documents required for Various Parties(B) Documents required for Various Parties
1.1. For the High Court:For the High Court:
Documentation in Documentation in
AmalgamationAmalgamation
I. With Application (first motion) II. With Petition (second
motion)
• Application (Summons for directions in Form No.
33)
• Director's Affidavit (Form No. 34)
• Vakalatnama
• Memorandum of registered office address
• Copy of MOA & AOA (both Companies)
• Balance sheet & Profit & Loss Account of Both
Companies
• Scheme of Amalgamation
• Confirmations / NOC of creditors (Secured &
Unsecured) [Transferor Company(ies) may also
enclose, if possible, to avoid their meetings]
• Summons for direction to convene the meeting of
the members of the transferor & transferee
Companies to approve of the Scheme(Form No.
35)
• Minutes of order
• Petition (Form No. 40)
• Vakalatnama
• Copy of Balance Sheet & Profit
& Loss A/c
• Memorandum of registered
office address
• Copy of MOA & AOA ( both
companies )
• Scheme of Amalgamation with
explanatory statement u/s 393
• Valuation Report for exchange
ratio
• Chairman's Report (Form 39)
• Director's Affidavit
• Copy of Court order on First
Motion Application (Form 35)

50. RASU SHARMA
[email protected]
(B) Documents required for Various Parties(B) Documents required for Various Parties
2.2. For Shareholders:For Shareholders:
•• Notice convening the meeting of the Equity Shareholders Notice convening the meeting of the Equity Shareholders
specifying therein date, time and place of meeting and name of specifying therein date, time and place of meeting and name of
person appointed as chairman or alternate chairman by the person appointed as chairman or alternate chairman by the
Court (to be given 21 clear days before the meeting under the Court (to be given 21 clear days before the meeting under the
authority of chairman appointed by Court through certificate of authority of chairman appointed by Court through certificate of
posting).posting).
•• Form of ProxyForm of Proxy
•• Copy of Scheme of AmalgamationCopy of Scheme of Amalgamation
•• Explanatory statements pursuant to Sec 393 of the Explanatory statements pursuant to Sec 393 of the
Companies Act, 1956 including details of shareholding of Companies Act, 1956 including details of shareholding of
directors of both the companies in both the companiesdirectors of both the companies in both the companies
Documentation in Documentation in
AmalgamationAmalgamation

51. RASU SHARMA
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(B) Documents required for Various Parties(B) Documents required for Various Parties
3.3. For Official Liquidator:For Official Liquidator:
•• Notice of petition with all enclosures to be served on Notice of petition with all enclosures to be served on
official Liquidator by Transferor official Liquidator by Transferor Company and on ROC by Company and on ROC by
both Companies.both Companies.
•• All details required to be furnished are as required by All details required to be furnished are as required by
the questionnaire issued upon the Company. Some of them are the questionnaire issued upon the Company. Some of them are
as under:as under:
(i) Whether the Company has complied with all the (i) Whether the Company has complied with all the
formalities as required to be done under the law.formalities as required to be done under the law.
(ii) Whether all details with regard to documentation (ii) Whether all details with regard to documentation
have have been filed with the R.O.C. etc.been filed with the R.O.C. etc.
Documentation in Documentation in
AmalgamationAmalgamation

52. RASU SHARMA
[email protected]
(B) Documents required for Various Parties(B) Documents required for Various Parties
4.4. For Registrar of Companies:For Registrar of Companies:
Documentation in Documentation in
AmalgamationAmalgamation
After Merger/amalgamation is
approved
• • Copy of application and petition should Copy of application and petition should
be filed with R.O.C.be filed with R.O.C.
    
• • R.O.C. looks into whether all R.O.C. looks into whether all
requirements are complied and if not requirements are complied and if not
satisfied it can file affidavit in the court satisfied it can file affidavit in the court
stating its objections, otherwise gives its stating its objections, otherwise gives its
NOC.NOC.
• • Copy of Order sanctioned by the Copy of Order sanctioned by the
Hon'ble High Court.Hon'ble High Court.
  
• • Scheme of Amalgamation.Scheme of Amalgamation.
  
• • Changed MOA & AOA (amended Changed MOA & AOA (amended
through Scheme)through Scheme)
  
• • Any other document which has to be Any other document which has to be
filed as per the requirements of the filed as per the requirements of the
Companies Act, 1956 or Companies Act, Companies Act, 1956 or Companies Act,
2013 2013 i.e.i.e. if, say, change of name or if, say, change of name or
change in object clause is also being done change in object clause is also being done
at the same time then procedure for the at the same time then procedure for the
same etc.same etc.

53. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to followed by the Transferee
Company and Transferor Company
1.1. Memorandum of Memorandum of
Association (Association (MOAMOA))
The MOA must provide the power to amalgamate in The MOA must provide the power to amalgamate in
its Objects Clause. If MOA is silent, amendment the its Objects Clause. If MOA is silent, amendment the
MOA to add Amalgamation as an object.MOA to add Amalgamation as an object.
2.2. Board MeetingBoard Meeting Board Meeting shall be convened to consider and Board Meeting shall be convened to consider and
pass the following requisite resolutions:pass the following requisite resolutions:
- to approve the draft scheme of amalgamation;to approve the draft scheme of amalgamation;
- to give authorization for filing of application to the - to give authorization for filing of application to the
Court for directions to convene a general meeting; Court for directions to convene a general meeting;
- to file a petition for confirmation of Scheme by the - to file a petition for confirmation of Scheme by the
High Court.High Court.

54. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
3.3. Application to the Application to the
CourtCourt
An application shall be made to the Court for An application shall be made to the Court for
directions to convene a general meeting by way of directions to convene a general meeting by way of
Judge's summons supported by an affidavit.Judge's summons supported by an affidavit.
The proposed Scheme of amalgamation must be The proposed Scheme of amalgamation must be
attached to such affidavit. attached to such affidavit.
Summons Summons - Form No. 33- Form No. 33
AffidavitAffidavit - Form No. 34 - Form No. 34
The summons should be accompanied by:The summons should be accompanied by:
  
(i) A certified copy of the MOA of both companies(i) A certified copy of the MOA of both companies
  
(ii) A certified true copy of the latest audited B/S and (ii) A certified true copy of the latest audited B/S and
P&L A/c of transferee companyP&L A/c of transferee company

55. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
4.4. Copy To Regional Copy To Regional
DirectorDirector
A copy of application made to concerned HC shall A copy of application made to concerned HC shall
also be sent to the R.D. of the region. also be sent to the R.D. of the region.
  
(Although, such notice is supposed to be sent by the (Although, such notice is supposed to be sent by the
HC, usually the company sends it without waiting for HC, usually the company sends it without waiting for
the HC to send it).the HC to send it).
5.5. Order of High Order of High
CourtCourt
On hearing of the summons, the HC shall pass the On hearing of the summons, the HC shall pass the
necessary orders which shall include:necessary orders which shall include:
  
Time and place of the meeting; Time and place of the meeting;
Chairman of the meeting;Chairman of the meeting;
Fixing the quorum;Fixing the quorum;
Procedure to be followed in the meeting for voting by Procedure to be followed in the meeting for voting by
the proxy;the proxy;
Advertisement of notice of the meeting;Advertisement of notice of the meeting;
Time limit for the chairman to submit the report to Time limit for the chairman to submit the report to
the court regarding the result of the meeting.the court regarding the result of the meeting.
Orders in Orders in - Form No. 35- Form No. 35

56. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
6.6. Notice of the Notice of the
MeetingMeeting
The notice of the meeting (Form No. 36) shall be sent The notice of the meeting (Form No. 36) shall be sent
to the creditors and/or to the shareholders to the creditors and/or to the shareholders
individually by the chairman so appointed by individually by the chairman so appointed by
registered post enclosing:registered post enclosing:
  
(i) A statement setting forth the following: (i) A statement setting forth the following:
  
- Terms of amalgamation and its effects- Terms of amalgamation and its effects
- Any material interests of the director, MDs or - Any material interests of the director, MDs or
Manager, in any capacityManager, in any capacity
-Effect of the arrangement on those interests.Effect of the arrangement on those interests.
(ii) A copy of the proposed scheme of amalgamation (ii) A copy of the proposed scheme of amalgamation
   
(iii) A form of proxy (Form No. 37)(iii) A form of proxy (Form No. 37)
  
(iv) Attendance slip(iv) Attendance slip
  
(v) Notice of the resolution for authorizing issue of (v) Notice of the resolution for authorizing issue of
shares to persons other than existing shareholders.shares to persons other than existing shareholders.

57. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
7.7. Advertisement of Advertisement of
Notice of MeetingNotice of Meeting
The notice of the meeting shall be advertised in an The notice of the meeting shall be advertised in an
English and Hindi Newspaper as the Court direct.English and Hindi Newspaper as the Court direct.
Advertisement in Advertisement in - Form No. 38- Form No. 38
8.8. Filing of Affidavit Filing of Affidavit
for the Compliancefor the Compliance
An affidavit not less than 7 days before the meeting An affidavit not less than 7 days before the meeting
shall be filed by the Chairman of the meeting with the shall be filed by the Chairman of the meeting with the
Court showing that the directions regarding the issue Court showing that the directions regarding the issue
of notices and advt. have been duly complied with.of notices and advt. have been duly complied with.
9.9. General MeetingGeneral Meeting The General Meeting shall be held to pass the The General Meeting shall be held to pass the
following resolutions:following resolutions:
  
(i) (i) Approving the scheme of amalgamation by ¾th Approving the scheme of amalgamation by ¾th
majoritymajority
  

58. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
(ii) (ii) Special Resolution authorizing allotment of shares Special Resolution authorizing allotment of shares
to persons other than existing shareholders or an to persons other than existing shareholders or an
ordinary resolution be passed subject to getting ordinary resolution be passed subject to getting
Central Government's approval for the allotment as Central Government's approval for the allotment as
per the provisions of Section 62 of the Companies per the provisions of Section 62 of the Companies
Act, 2013 (earlier Section 81(1A) of the Companies Act, 2013 (earlier Section 81(1A) of the Companies
Act, 1956). Act, 1956).
(iii) (iii) The resolution to empower directors to dispose of The resolution to empower directors to dispose of
the shares not taken up by the dissenting the shares not taken up by the dissenting
shareholders at their discretion.shareholders at their discretion.
(iv) (iv) An ordinary/special resolution shall be passed to An ordinary/special resolution shall be passed to
increase the Authorized share capital, if the proposed increase the Authorized share capital, if the proposed
issue of shares exceeds the present authorized issue of shares exceeds the present authorized
capital. capital.
Note:Note: The decision of the meeting shall be The decision of the meeting shall be
ascertained only by taking a poll on the resolutions.ascertained only by taking a poll on the resolutions.

59. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
10.10. Reporting of Reporting of
Result of the Result of the
MeetingMeeting
The Chairman of the meeting shall report the result The Chairman of the meeting shall report the result
thereof to the Court within the time fixed by the judge thereof to the Court within the time fixed by the judge
or within 7 days, as the case may be. or within 7 days, as the case may be.
Report in Report in - Form No. 39- Form No. 39
11.11. Formalities with Formalities with
RoCRoC
The following documents shall be filed with ROC The following documents shall be filed with ROC
along with the requisite filing fees:along with the requisite filing fees:
Form No. MGT-14 of Companies (Management and Form No. MGT-14 of Companies (Management and
Administration) Rules, 2014 + Administration) Rules, 2014 +
(i) Copy of Special Resolution (i) Copy of Special Resolution
  
(ii) Resolution approving the scheme of amalgamation(ii) Resolution approving the scheme of amalgamation
  
(iii) Special resolution passed for the issue of shares (iii) Special resolution passed for the issue of shares
to persons other than existing shareholders to persons other than existing shareholders (no need (no need
in case of Transferor Company (ies). in case of Transferor Company (ies).

60. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
12.12. PetitionPetition For approval of the scheme of amalgamation, a For approval of the scheme of amalgamation, a
petition shall be made to the HC within 7 days of the petition shall be made to the HC within 7 days of the
filing of report by the chairman.filing of report by the chairman.
Report in Report in - Form No. 40- Form No. 40
Note:Note: If the Regd. Offices of the companies are in If the Regd. Offices of the companies are in
same state - then both the companies may move same state - then both the companies may move
jointly to the High Court.jointly to the High Court.
  
If the Regd. Offices of the Companies are in different If the Regd. Offices of the Companies are in different
states - then each Company shall move the petition in states - then each Company shall move the petition in
the respective High Court for directions.the respective High Court for directions.

61. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
13.13. Sanction of the Sanction of the
SchemeScheme
The Court shall sanction the scheme and pass the The Court shall sanction the scheme and pass the
Orders, on being satisfied that:Orders, on being satisfied that:
(i) The whole scheme is annexed to the notice for (i) The whole scheme is annexed to the notice for
convening meeting, (this provision is mandatory in convening meeting, (this provision is mandatory in
nature).nature).
  
(ii) The scheme has been approved by the company by (ii) The scheme has been approved by the company by
means of ¾th majority of the members present.means of ¾th majority of the members present.
  
(iii) The scheme is genuine and bona fide and not (iii) The scheme is genuine and bona fide and not
against the interests of the creditors, the company against the interests of the creditors, the company
and the public interest.and the public interest.
Orders in Orders in - Form No. 41- Form No. 41

62. RASU SHARMA
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The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
14.14. Stamp DutyStamp Duty A scheme sanctioned by the court is an instrument A scheme sanctioned by the court is an instrument
liable to stamp duty.liable to stamp duty.
15.15. Filing with RoCFiling with RoC The following documents shall be filed with ROC The following documents shall be filed with ROC
within 30 days of order:within 30 days of order:
  
(i)(i)Form No. INC-28 (Notice of order of the Court or Form No. INC-28 (Notice of order of the Court or
other authority) of Companies (Incorporation) Rules, other authority) of Companies (Incorporation) Rules,
2014.2014.
(ii)(ii)A certified true copy of Court's OrderA certified true copy of Court's Order

63. RASU SHARMA
[email protected]
The procedural steps in Amalgamation are as under:The procedural steps in Amalgamation are as under:
Steps for AmalgamationSteps for Amalgamation
Sr. No.Points to look
into
Steps to be followed by the Transferee
Company and Transferor Company
16.16. Copy of Order to Copy of Order to
be Annexed to be Annexed to
every copy of MOAevery copy of MOA
A copy of court's order shall be annexed to every copy A copy of court's order shall be annexed to every copy
of the Memorandum of Association issued after the of the Memorandum of Association issued after the
certified copy of the order has been filed with as certified copy of the order has been filed with as
aforesaid.aforesaid.
17.17. Allotment of Allotment of
SharesShares
A Board Resolution shall be passed for the allotment A Board Resolution shall be passed for the allotment
of shares to the shareholders in exchange of shares of shares to the shareholders in exchange of shares
held in the Transferor Company and to fix the record held in the Transferor Company and to fix the record
date for this purpose.date for this purpose.

64. RASU SHARMA
[email protected]

65. RASU SHARMA
[email protected]
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