Amalgamation

Amalgamation Articles

Amalgamation or Merger of Companies

Steps wise procedure for Amalgamation

SNo.

Particulars

Timeline (if any)

1

Due Diligence Report of both Transferor and Transferee

 

2

Valuation Report

 

3

Section 230 - Convene  a Board Meeting of Transferor and Transferee Companies for

·         To consider and approve the scheme of Arrangement or Amalgamation

·         To accept the report of CA on Valuation and Share Exchange Ratio

·         To authorize any director of the Company for filing of proposed scheme with concerned authorities and to do other matters incidental thereto

X

4

Section  117 read with 179(3) – Filing of Board Resolution for amalgamation  in MGT-14

Within 30 days of X

5

Documents to be annexed with the First Motion Application :

1.       A notice of admission in Form NCLT-2

2.       An affidavit in Form NCLT-6

3.       Affidavit verifying the application

4.       Board Resolution

5.       Draft scheme of Merger

6.       Latest financial position/ provisional balance sheet of the company (not older than 6 months)

7.       Auditor’s report on the accounts along with Balance sheet of the company for preceding 5 Financial Year and

8.       The pendency of any investigation or proceedings against the company

9.       Reduction of share capital of the company, if any, included in the compromise or   arrangement.

10.   List of directors

11.   List of Members

12.   List of secured and unsecured Creditors

13.   Basis on which each class of members or creditors has been identified for the purposes of approval of the scheme;

14.   CA certificate for secured and unsecured creditors,

15.   Consent affidavits of Creditors if meeting sought to be dispensed,

16.   Auditor's certificate for accounting treatment

 

6

Section 230(1) read with Rule 3 of CAA Rules, 2016

Prepare and File First Motion Application with NCLT for an order convening meeting of shareholders and creditors of Transferor and Transferee in Form NCLT-1  along with requisite docs and fee of Rs. 5,000/-

 

7

Section 230(1) read with Rule 5 of the CAA Rules, 2016

NCLT will give order on the Application of the Company on the following:

1.       Determining the class or classes of creditor or of members whose meeting or meetings or dispensing with the meeting of creditors in terms of section 230(9).

2.       Fix the time and place of the meeting or meetings

3.       Appointment of the Chairperson and scrutinizer for the meeting or meetings to be held, as the case may be and fixing the terms of his appointment including remuneration

4.       Fix the quorum and the procedure to be followed at the meeting or meetings.

5.       Determining the values of the creditors or the members, or the creditors or member of any class, as the case may be, whose meetings have to be held

6.       Notice to be given of the meeting or meetings and the advertisement of such notice

7.       Notice to be given to sectoral regulators or authorities as required under sub-section (5) of section 230

8.       Time within which the chairperson of the meeting will give his report the NCLT; and

 

8

Notice to be sent by the Chairman in Form CAA-2 to the members and creditors along with the requisite docs and disclosures

1 month before the date of meeting

9

Notice in Form CAA-2 shall be advertise in English Newspaper & Vernacular Language

30 days before the date of meeting

10

Sec 230(5) read with Rule 8:

Notice of the Meeting in Form CAA-3 is required to sent to the following authorities by registered post/ speed post/ courier/ e-copy/ hand delivery :

1.       Central Government (RD)

2.       ROC

3.       Income Tax Authority

4.       Other Sectoral regulators or Authorities as directed by NCLT

 

11

Rule 12 of CAA, Rules 2016

The Chairman appointed for the meeting of the Company or other person directed to issue the notices of the meeting shall file an affidavit before NCLT that the directions regarding the issue of notices and advertisement have been duly complied with.

Within 7 days before the date fixed for the meeting

12

Section 230(6) read with Rule 13

Convene meeting of members and creditors to approve the scheme with 3/4th majority

 

13

Rule 14 of CAA Rules, 2016

The Chairman of the meeting shall submit a Report in Form CAA-4 to NCLT on the result of the meeting

Within 3 days after conclusion of the meeting or the date fixed by NCLT

14

Section 230 and 232 read with Rule 15

File Second Motion application with NCLT in Form CAA-5 for confirmation of scheme of merger or amalgamation

Within 7 days of filing of report of the Chairman to NCLT

15

Rule 16 of CAA Rules 2016

NCLT will fix a date of hearing and also give directions to issue Notices to regulators for their observations.

 

16

File Copies of application  with ROC, RD, OL, Income Tax authority and other sectoral regulators, as the case may be

 

17

RD and OL will seek necessary information from the transfree and transferor Company

 

18

Obtain No Objection report from RD and OL

 

19

Rule 16 of CAA Rules 2016

Notice of hearing shall be advertised in the same newspapers in which notice of meeting was advertise

Not less than 10 days before the date fixed for hearing

20

Affidavit of service and NOC shall be filed with NCLT

At least 7 days before the date of Hearing

21

Section 232 read with Rule 20

After hearing, NCLT may pass the order of merger or amalgamation in Form CAA-7

 

22

Section 230(8) read with Rule 17 of CAA Rules, 2016

The certified copy of NCLT order shall be filed with ROC in form INC-28

 

Along with Application for merging authorized capital

Within 30 days of receipt of Certified copy of order

23

Section 39, 173 and 23

Hold a meeting of the Board for allotment of shares as per the scheme approved by NCLT

 

24

Section 39 and 232 read with Rule 12 of Companies (Prospectus and Allotment of Securities)

File a return of allotment for allotment of shares in accordance with share exchange ratio as provided in the scheme of  amalgamation in Form PAS -3

 

25

Section 232(7) read with Rule 12 of the Companies CAA Rules, 2016

Every company in relation to which the order is made, shall until the scheme is fully implemented, file with ROC, the statement in Form CAA-8 attach with Form  GNL-1

Within 210 days from the end of the each Financial Year

26

Section 239

The books and papers of a Company which has been amalgamated with, or whose shares have been acquired by another company shall not be disposed of without the prior permission of the Central Government

 

 

 

Posted on: May 23, 2019   Author: Team Read More

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Amalgamation or Merger of Companies
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