First Notes on. 12 December 2016. National Company Law Tribunal Rules, 2016. Mergers, Amalgamation and Demergers of Companies under the Companies Act 1956 are governed by sections 391 to 396 Companies Act 1956. It is a modern and contemporary law enacted after several rounds of deliberations with various stakeholders. BSD and SSD reliefs may be granted on the instruments to transfer the assets if certain conditions are met. Consequently, w.e.f. 15.12.2016 all the matters relating to Compromises, Arrangements, and Amalgamations (hereafter read as “CAA”) will be dealt as per provisions of Companies Act, 2013 and The Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016. Section relating to CAA is Section 230-233 and 235-240. NCLT (Procedure for reduction of share capital of company) Rules, 2016 Definition of “company” for the purpose ofSf Sec 391- 394 Sec 390- ‘company’ means any “company liable to be wound up under this Act”: {Landmark ruling in Khandelwal Udyog Ltd. and ACME Mfg. Amalgamation will not impose any additional burden on the members of the Transferor Company or the Transferee Company. The Companies Act, 2013 (2013 Act) has seen the light of day and replaced the 1956 Act with some sweeping changes including those in relation to mergers and acquisitions (M&A). Effective Date: 15/12/2016. The Companies Act, 2004 203. Exemption from court process Companies Act 2013 Companies Act 1956 Option to following companies to undertake corporate reorganizations like amalgamation, demerger, etc. Liability of members 206. as per the provisions of the Companies Act, 2013 for approving any scheme of arrangement, compromise or reconstruction of companies under Sections 230 to 232 of the Companies Act, 2013. 192. Notified Date of Section: 7/12/2016. These are two business strategies adopted by the companies to expand itself and take a competitive position in the market. Arrangements and Reconstruction 191. Companies Act, 1956 (CA) facilitates compromise, arrangement or reconstruction of a business (sections 390 to 396A of CA) The terms ‘merger’ and ‘amalgamation’ are synonymous In amalgamation, the undertaking, i.e. 3453(E) dated 15.11.2016]. Today, we learn the provisions of … Section 232 of Companies Act, 2013 – Merger and amalgamation of companies. Amalgamation is the process where two different business entities join together for the purpose of making a totally new business entity to sustain in the market by absorbing the other company. the amalgamation proposal all proceedings pending by or against. Power to compromise with creditors and members. Read about the highlights of the companies act 2013 and download Indian Companies Act 2013 notes PDF for UPSC 2021 1[Omitted] Reference 1. 15.1. Merger Amalgamation Companies Act 2013. In relation to merger and acquisitions (M&A), Companies Act, 2013 has replaced the 1956 Act. The new Act enhanced disclosure norms and providing protection to investors and minorities thereby making M&A smooth and efficient. 195. Court approval of indemnity. In amalgamation, two or more companies are fused into one by merger or by one taking over the other. Financial reporting. Provisions relating to merger, amalgamation and winding-up etc. It includes: Two or more companies join to form a new company. [ 4 ] When two companies are merged and are so joined as to form third company or one is absorbed into other or blended with another, the amalgamating company loses its identity. Companies Act, 2013. Section 230-240 of the Companies Act, 2013 ("the Act") provide us with a mechanism where in a scheme of arrangement may be entered into between a company, its creditors or and its members. On 31st March, 2012, Thin Ltd. was absorbed by Thick Ltd., the latter taking over all the assets and liabilities of the former at book values. In this study we are primarily concerned with the scope and objectives of and law and practice relating to corporate restructuring. Section 232 of the Companies Act, 2013 deals with mergers and amalgamation including demerger. 2. Arrangement! 22-1st January, 1964 Amalgamation, Reconstruction, Mergers, Take-over of Companies The Companies Act, 2013 contains provisions relating to various methods of reorganisation of companies under Sections 230 to 240 of the Act. 262. Information as to compromise with creditors and members. or the scheme in the Court, thus opening up the amalgamation to a lot of unnecessary scrutiny.xx The Companies Act, 2013 The 2013 Act has S. 235 which seeks to protect the minority shareholders. Sec 394 - Provisions for facilitating reconstruction and amalgamation of companies. 1 The Companies Act, 2013 1 – 22 Section – B : Other Corporate Laws 2 SEBI Laws and Regulations 23 – 31 3 The Competition Act, 2002 32 – 36 4 Foreign Exchange Management Act, 1999 37 – 41 5 Laws Related to Banking Sector 42 – 48 6 Laws Related to Insurance Sector 49 – 54 Read about the highlights of the companies act 2013 and download Indian Companies Act 2013 notes PDF for UPSC 2021 ... - A scheme of reconstruction or amalgamation, Sector. 2— Objects of this Act. Banking and insurance. 192. Part 19-02-12 Restriction of losses by reference to capital allowances and renewal allowances (section 555 Taxes Consolidation Act 1997) [PDF] 05-Jul-2016 [PDF… Arrangements and Reconstructions 206. True 2. Information as to compromise with creditors and members. download pdf. 17 of 2015 Date of Assent: 11 th September, 2015 Date of Commencement: Section I on 15th September, 2015 All other provisions: See Section 1 (3) and (4) ARRANGEMENT OF SECTIONS Section PART I—PRELIMINARY I —Short title and commencement. as Amalgamation/ Absorption/ External reconstruction. 193. The Companies Act, 2013 contains provisions relating to various methods of reorganisation of companies under Sections 230 to 240 of the Act. i.e., Compromise, Arrangements, Reconstruction, Amalgamation & Mergers. Compromise and Arrangements: The term ‘compromise’implies the existence of adisputesuch as relating to rights. OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 I. PREAMBLE This Scheme of Amalgamation is presented under Sections 230 to 232 of the Companies Act, 2013 and other applicable provisions, if any, of the Companies Act, 2013, as may be applicable, for amalgamation … The Companies Act, 2013 (‘2013 Act’), enacted on 29 August 2013 on accord of Hon’ble President’s assent, has the potential to be a historic milestone, as it aims to improve corporate governance, simplify regulations, enhance the interests of minority investors and for the first time legislates the role of whistle-blowers. The Companies Act, 2013 (2013 Act) has seen the light of day and replaced the 1956 Act with some sweeping changes including those in relation to mergers and acquisitions (M&A). 204. [ Effective from 15th December, 2016] (1) Where an application is made to the [2] Tribunal under section 230 for the sanctioning of a compromise or an arrangement proposed between a company and any such persons … 1.Regulatory Framework For Merger/Amalgamation The Regulatory Framework of Mergers and Amalgamations covers . 194. Provisions for facilitating reconstruction and amalgamation of companies. The new act has different provisions in relation to different types of restructuring processes as follows: Compromise or arrangements under section 230 & 231of the Act; Amalgamation including demergers falls within section 232 of the Act; An amalgamation of small companies within section 233 of the Act; under the Companies Act, 2013 December 15, 2016 In brief Recently, the Ministry of Corporate Affairs (MCA) has notified the much-awaited sections in the Companies Act (CA), 2013 dealing with amalgamation, compromise, arrangement, liquidation and winding up. According to sec. Amalgamation Demerger Financial Restructuring Acquisition of shares Deals with section 230- 234 Deals with section 235 - 236 Under Section 237 of Companies Act, 2013 Central Government may Amalgamate two Companies in public interest Consolidation of businesses / entities Divest non-core business Acquiring interest in new business/ entity 193. COMPANIES ACT, 2013. THE COMPANIES ACT No. companies under the Companies Act, comments and inputs from the Income Tax Department may invariably be obtained so as to ensure that the proposed scheme of reconstruction or amalgamation has not been designed in such a way as to defraud the Revenue and consequently being prejudicial to public 2. compromise/arrangement proposed in connection with a scheme for reconstruction or amalgamation of companies • Powers of the NCLT to give directions • Schedule of fees to be submitted with the application/petition. If the ABC Limited and DEF Limited are taken over by a new … Mergers, Amalgamation and Demergers of Companies under the Companies Act 1956 are governed by sections 391 to 396 Companies Act 1956. 34 ... reconstruction or amalgamation shall be fully and effectively carried out. 200. (2) Where a compromise or arrangement is proposed for the purposes of or in connection with scheme for the reconstruction of any company or companies, or for the amalgamation of any two or more companies, the petition shall pray for appropriate orders and directions under section 230 read with section 232 of the Act. Credits and Acknowledgments. Prior… Read More Section 262 of the Companies Act, 2013: Sanction of scheme COMPANIES ACT, 2013. Ltd., Re, (1977) 47 Com Cases 503(1977) 47 Com Cases 503 clarifies the meaning of aboveclarifies the meaning of above phrase all companies registered under the provisions of the Companies Act, ACCOUNTING FOR AMALGAMATIONS The accounting issues pertaining to amalgamation as defined under the provision of the companies act’1956 are dealt under Accounting Standard (AS) 14 as evolved by the institute of charted accountant of India. Amalgamation III. It requires companies to make application to the court under section 391, which empowers the court to sanction the compromise or arrangement proposed by the companies. Modes of winding-up 205. A feature which is common in all cases of merger viz. It moves from the regime of control to that of liberalization/ 2. Definition of “company” for the purpose ofSf Sec 391- 394 Sec 390- ‘company’ means any “company liable to be wound up under this Act”: {Landmark ruling in Khandelwal Udyog Ltd. and ACME Mfg. Winding up and dissolution. Information as to compromise with creditors and members. Application of repealed Act 207. In Companies Act, 1956 with respect to minority shareholder right for reconstruction and amalgamation of companies, under section 395 states that for the transfer of shares or any class of shares of a company to another company, consent of the holders of at least (9/10) i.e. without Court process Between two or more small companies as No provisions for exemption from court process for defined in the Cos Act 2013. Rights of minority on take-over 203. Provisions for facilitating reconstruction and amalgamation of companies 201. 194. Corporate law updates. Chapter 12 Simplified Approach to Company Law 278 Chapter overview Regulatory Framework for Merger/Amalgamation A. 33 of 2009, 37 of 2010, 16 of 2011, 29 of 2011, 6 of 2012, 14 of 2012, 29 of 2012, 1 of 2013, 6 of 2013, 14 of 2015, 3 of 2016, 2 of 2017, 42 of 2017, 46 of 2018, 37 of 2018, and the Companies (Amendment of Schedule) Order, 2011. Section – A : Companies Act Page No. Chapter XV (Sections 230–240) of the Companies Act, 2013 (CA 2013) deals with the provisions related to Compromises, Arrangements and Amalgamations.Section 232 of CA 2013 provides for merger and amalgamation of companies. Companies may combine in following ways I. Absorption II. S.O. 15. Power to compromise with creditors and members. All. Reconstruction and Amalgamation. 2. Power to compromise with creditors and members. Permission of Tribunal: The company must get the due permission of the court or tribunal before starting the process of the capital reduction. MERGER & AMALGAMATION. is eligible to be appointed as an independent director under Section 149 of Companies Act, 2013 if the corporate person is a company. 2. Companies Act, 1956. The merger and amalgamation of corporate constitutes a subject matter of the Companies Act, the courts and law and there are well laid down procedures for valuation of shares and rights of investors. Amalgamation, as its name suggests, is nothing but two companies becoming one.On the other hand, Absorption is the process in which the one dominant company takes control over the weaker company. 15-11-2016] Section 325 was omitted pursuant to section 255 of the Insolvency and Bankruptcy Code, 2016 vide Notification No. Ii ) External reconstruction ( iii ) Amalgamation Ltd. is formed to take over the of. Section 233 of the Companies Act, 2013 (CA 2013) dealing with "Merger or Amalgamation of Certain Companies" has also come into force with effect from 15th December, 2016. 61 of the companies act, 2013, a limited company can increase, sub-divide or consolidate all or part of its existing share if authorised by its articles of association. 192. CAA. TOOLS OF RESTRUCTURING Merger / Amalgamation Demerger Financial Reconstruction Acquisition of shares Deals with section 230- 234 Deals with section 235 - 236 Under Section 237 of Companies Act, 2013 Central Government may Amalgamate two Companies in public interest CHAPTER XIII WINDING UP AND DISSOLUTION 63. By a compulsory amalgamation companies in the public interest or by and order of the central government. 191. Disclosures. Regulatory and other information. Section 686 provides that before the effective date of the amalgamation proposal, the court may disallow or modify the amalgamation ; Companies Act 2013 - Features, New Amendments, Comparison with Indian Companies Act 1956. However, one should remember that Amalgamation as its name suggests, is nothing but two companies becoming one. 4. Amalgamation –means an amalgamation pursuantto the provisions ofthe Companies Act 1956 or any otherstatute whichmay be applicable to companies. Omitted by the Eleventh Schedule (Sec. (1) Where an application is made to the Court under section 391 for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are mentioned in that section, and it is shown to the Court The Companies Act, 2013 Chapter-XIX Revival and Rehabilitation of Sick Companies Section 262: Sanction of scheme. Fast Track Mergers and Amalgamation. Affidavit of Service: Liability to Service: The Chairperson appointed for the meeting of the company … Section 234 of the Companies Act, 2013 deals with the amalgamation of companies with a foreign company. When companies undergo reconstruction or amalgamation, the undertaking (i.e. - (1) The notice of the proposed scheme, under clause (a) of sub-section (1) of section 233 of the Act, to invite objections or suggestions from the Registrar and Official Liquidator or persons affected by the scheme shall be in Form No. registered under the Companies Act, 2013. Sl. Companies Act, 1956. Provisions for facilitating reconstruction and amalgamation of companies 201. By scheme of arrangement. (1) In the winding up of an insolvent company, the same rules shall prevail and be observed with regard to— Arrangements, Reconstruction & Amalgamation under Singapore Companies Act - Part I. CS Meenakshi Jayaraman. Reconstruction and Amalgamation. Provisions relating to merger, amalgamation and windingup, - etc. Arrangements and Reconstruction. 22. Recently, we have discussed in detail section 231 (Power of Tribunal to enforce compromise or arrangement) of CA 2013. It requires companies to make application to the court under section 391, which empowers the court to sanction the compromise or arrangement proposed by the companies. 193. Companies Act, 2013 as introduced, contained 29 chapters, 479 clauses and 7 schedules. Amalgamation Demerger Financial Restructuring Acquisition of shares Deals with section 230- 234 Deals with section 235 - 236 Under Section 237 of Companies Act, 2013 Central Government may Amalgamate two Companies in public interest Consolidation of businesses / entities Divest non-core business Acquiring interest in new business/ entity business) or shares (collectively known as “assets”) may be transferred by the owner (“Transferor”) to the recipient (“Transferee”). 192. Amalgamation or merger is also a method of reconstruction. No. TOOLS OF RESTRUCTURING Merger / Amalgamation Demerger Financial Reconstruction Acquisition of shares Deals with section 230- 234 Deals with section 235 - 236 Under Section 237 of Companies Act, 2013 Central Government may Amalgamate two Companies in public interest Power to acquire shares of minority on take-over 202. 205. Sec. Section 686 provides that before the effective date of the amalgamation proposal, the court may disallow or modify the amalgamation ; Companies Act 2013 - Features, New Amendments, Comparison with Indian Companies Act 1956. 1.13. i.e., Compromise, Arrangements, Reconstruction, Amalgamation & Mergers. 21. The company wished to avoid being wound up and negotiated a scheme in which the existing shareholdings in the company would be transferred to a new company which would take over the company’s undertaking and assets as well as its debts. 22. Special Resolutions under Companies Act 2013 The below chart contains list of Special Resolutions which are to be passed by all companies (wherever required) under Companies Act 2013 S.NO SECTION PURPOSE 1 12 (5) Change of Registered office outside the … 195. It corresponds to S. 395 of the 1956 Act. (a) internal reconstruction (b) absorption (c) external reconstruction (d) amalgamation 8. supplanted by new Companies Act, 2013. Amalgamation is the consolidation or combination of two or more companies known as the amalgamating companies usually the companies that operate in the same or similar line of business to form a completely new company whereas merger refers to the consolidation of two or more business entity to form one single joint entity with the new management structure and new business ownership … The Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 includes provision for determination of sickness, application for revival, appointment of interim/Company administrator, time bound revival process and if revival not possible, liquidation process through single regulator ‘National Company Law Tribunal’. Companies Act, 2013 for approving any scheme of arrangement, compromise or reconstruction of companies under section 230 to 240 of the Companies Act, 2013.; 1.6 "Effective Date" means the last of the dates on which all the conditions andmatters referred to in …
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