FAST TRACK: Mergers & Acquisitions

Companies who may enter into the scheme of merger or amalgamation: A merger or amalgamation scheme may be entered into between two or more small companies, or between a holding company and its wholly-owned subsidiary company, or between two or more start-up companies, or between one or more start-up companies and one or more small companies.

Filing of copy of scheme with the Central Government, Registrar, and the Official Liquidator: The transferee company must file a copy of the approved scheme with the Central Government, Registrar, and Official Liquidator in the jurisdiction where the company's registered office is situated.

Approval or Rejection of scheme: If the Registrar or the Official Liquidator has no objections or suggestions to the scheme upon receipt, the Central Government shall register it and issue a confirmation to the companies. If the Registrar or Official Liquidator has any objections or suggestions, he must submit them to the Central Government in writing within thirty days. If he does not make such a communication, it is assumed that he has no objections to the scheme. 

Filing of application by Central government with Tribunal: If, after receiving the objections or suggestions, the Central Government believes that such a scheme is not in the public interest or in the interest of the creditors, it may file an application before the Tribunal within sixty days of receiving the scheme, stating its objections and requesting that the Tribunal consider the scheme under section 232.

Passing of an order of Tribunal: On receipt of an application from the Central Government or from any person, if the Tribunal is of the opinion that the scheme should be considered in accordance with the procedure outlined in section 232, it may direct accordingly or confirm the scheme by passing such order as it deems fit: If the Central Government does not object to the scheme or does not file an application under this section before the Tribunal, it is presumed that it does not object to the scheme.

Communication of order to the registrar: A copy of the order confirming the scheme shall be communicated to the Registrar having jurisdiction over the transferee company and the persons involved, and the Registrar shall register the scheme and issue a confirmation thereof to the companies, with such confirmation being communicated to the Registrars where the transferor company or companies were situated.

Dissolution of transferor company: The scheme's registration is deemed to have the effect of dissolving the transferor company without the need for a winding-up procedure.

Effect of merger and amalgamation on transferee: On merger or amalgamation, a transferee company shall not hold any shares in its own name or in the name of any trust, either on its own behalf or on behalf of any of its subsidiary or associate companies, and all such shares shall be canceled or extinguished.

Filing of an application by transferee company with the Registrar: The transferee company must file an application with the Registrar, along with the scheme registration, indicating the revised authorized capital and paying the applicable fees.