Fast Track MergerFast track merger can take place between two or more small companies or merger between Holding & Subsidiary Company .The Procedure of Amalgamation as prescribed in Section 232 involves getting approvals from Tribunal which is very costly and time consuming affair. it was felt that certain companies i`e small companies should not be required to undergo the lengthy process for seeking approval from Tribunal, Consequently a simplified procedure has been introduced under Section 233 of Companies Act 2013 . Now Small companies and Wholly owned Subsidiary companies need not apply to NCLT for approval for the scheme of Amalgamation.
Merger and Amalgamation Procedural Aspects with Checklist:
|Step No.||Detailed Steps||Time limit||Documents to be filed||By whom|
|1||Convene & hold a Board Meeting:|
|a)Approval of the scheme; |
b)Fixing date, time and place for convening of shareholders meeting;
c)Fixing date, time and place for convening of creditors meeting.
|Both Transferor and Transferee|
|2||Pass the following resolutions:|
|The notice of the proposed scheme inviting objections or suggestions, if any, shall be sent to the Registrar of Companies (“ROC”) and Official Liquidators where registered office of the respective companies are situated or persons affected by the scheme along with a copy of the Scheme.||After holding the Board meeting||CAA.9||Both Transferor and Transferee|
|3||Filing a declaration of solvency with the ROC|
|Each of the companies involved in merger shall files a declaration of solvency, in the prescribed form, with the ROC where the registered office of the company is situated, before convening the meeting of members and |
creditors for approval of the scheme.
|CAA.10||Both Transferor and Transferee|
|4||Convening a meeting of members|
|The notice of the meeting sent to the members shall be accompanied by –|
a)A statement, disclosing the details of the compromise or arrangement, as far as applicable, as referred to in sub- section 230 (3) of the Act read with sub-rule (3) of rule 6 of the Rules.
|5||Convening a meeting of creditors|
|The notice of the meeting sent to the creditors shall be accompanied by –|
a)a statement, disclosing the details of the compromise or arrangement, as far as applicable, as referred to in sub- section 230 (3) of the Act read
with sub-rule (3) of rule 6 of the Rules.
b)the declaration of solvency made in Form No. CAA.10;
c) a copy of the scheme.
The scheme is to be approved by majority representing nine-tenths
in value of the creditors or class of creditors of respective
companies indicated in a meeting.
|Clear 21 days before the date of the meeting||Both Transferor|
|6||Filing of the Scheme|
|a) File a copy of Scheme and report of the result of each of the meetings with the Regional Director.|
b) A copy of the scheme along with Form CAA. 11 shall also be filed with :
the ROC in Form GNL 1 the Official Liquidator through hand delivery or by registered post or speed post.
|Within seven days|
from the conclusion of the meeting of members or creditors.
|a) CAA.11||b) GNL 1|
|7||Approval of the Scheme by the Regional Director|
|1.On the receipt of the scheme, if the ROC or the Official Liquidator has no objections or suggestions to the scheme, the Regional Director shall register the same and issue a confirmation thereof to the companies.|
2.If the ROC or Official Liquidator has any objections or suggestions, he may communicate the same in writing to Regional Director within a period of thirty days. If no such communication is made, it shall be presumed that he has no objection to the scheme.
3.If the Regional Director after receiving the objections or suggestions or for any reason is of the opinion that such a scheme is not in public interest or in the interest of the creditors, it may file an application before the Tribunal in Form No. CAA.13 within a period of sixty days of the receipt of the scheme under sub-section (2) stating its objections and requesting that the Tribunal may consider the scheme under section 232.
4. On receipt of an application from the Regional Director or from any person, if the Tribunal, for reasons to be recorded in writing, is of the opinion that the scheme should be considered as per the procedure laid down in section 232, the Tribunal may direct accordingly or it may confirm the scheme by passing such order as it deems fit.
5. If the Regional Director does not have any objection to the scheme or it does not file any application under this section before the Tribunal, it shall be deemed that it has no objection to the scheme.
6.Where no objection or suggestion is received to the scheme from the ROC and Official Liquidator or where the objection or suggestion of ROC and Official Liquidator is deemed to be not sustainable and the Regional Director is of the opinion that the scheme is in the public
interest or in the interest of creditors, the Regional Director shall issue a confirmation order of such scheme of merger or amalgamation in Form No. CAA. 12.
|8||Filing of confirmation order with the ROC|
|A copy of the order confirming the scheme by the Tribunal or Regional Director shall be communicated to the ROC having jurisdiction over the|
transferee company and the persons concerned and the ROC shall register the scheme and issue a confirmation to the companies and such confirmation shall be communicated to the ROC where transferor company or companies were situated.
|Within 30 days of|
the receipt of the
order of confirmation of the scheme.
|Form INC-28||Transferor and|
Fast Track Merger & Amalgamation Scheme
The merger & Amalgamation Scheme is the most important document in the whole process. It should be drafted in such a way to give a detailed disclosure about the Scheme. A copy of scheme of compromise or arrangement should include the following disclosures:-
A. All material facts relating to the company, such as the latest financial position of the company, the latest auditor’s report on the accounts of the company and the pendency of any investigation or proceedings against the company;
B. Reduction of share capital of the company, if any, included in the amalgamation;
C. Any scheme of corporate debt restructuring consented to by not less than seventy-five per cent of the secured creditors in value, including—
- Safeguards for the protection of other secured and unsecured creditors;
- Report by the auditor that the fund requirements of the company after the corporate debt restructuring as approved shall conform to the liquidity test based upon the estimates provided to them by the Board
- Where the company proposes to adopt the corporate debt restructuring guidelines specified by the Reserve Bank of India, a statement to that effect; and
- A valuation report in respect of the shares and the property and all assets, tangible and intangible, movable and immovable, of the company by a registered valuer.
- Fee as prescribed in the Schedule of Fees
Apart from the above the applicant shall also disclose the basis on which each class of members or creditors has been identified for the approval of the scheme.
Muds – Fast Track Merger & Amalgamation Consultant in Delhi
Muds Management Private Limited is a Top notch firm to provide fast Track merger & amalgamation services in Delhi NCR. The firm is run by a team of professionals comprising MBAs, CSs, CAs, CWAs, Lawyers and others. The team members have expertise in their specific domain knowledge, along with the skills of all service areas being offered to various client-strata. This, in turn, helps us deliver our client the services catering to their urgent and specific need coupled with a focus on macro issues.