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Acquisition and Amalgamation

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30 views4 pages

Acquisition and Amalgamation

Uploaded by

niharikagupta0820
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ACQUISITION AND AMALGAMATION

SECTION 230-240

__________________________________________________________________

Section 230- Compromise, Arrangement, Amalgamation

 Applicant(Creditor, members, company, liquidators of the company).Applicant gives


application for compromise, arrangement, amalgamation and approval of NCLT is
important.
 NCLT approval under section 230(1) along with
a. Material facts
b. Reduction of share capital
c. Consent of creditors (75%)
d. Offer, disclosure
 NCLT will order a meeting and notice will be send to all the members, creditors,
debenture holders, in website of the company.
a. If listed company then SEBI and Stock Exchange should be informed by the notice so
that they can post in their website.
English newspaper and 1 vernacular newspaper
Central gov, RBI, Income Tax Authority, Competition Commission of India for
representation within 30 days.
 Voting should be conducted (75% people should be agreed within 1
 +month).Voting should be conducted through themselves, proxy, portoll ballet,
electronically.
 If any person have to make objection then
a. For shareholder if any objection then by minimum 10% of share capital
b. For creditors it can be made by minimum 5% of outstanding debenture
 NCLT passes final order and should provide for all required matters under section 130(7).
 Filling of order with ROC within 30 days.

Section 231:- power of tribunal to enforce compromise or arrangement of 230.

 Can supervice the implementation of the compromise and arrangement.


 Can give further directions
 Can order winding up of the company

Section 232:- Merger and Amalgamation of companies.

Procedure of 230 + If any compromise include merger and amalgamation then additional points
for that are-

Along with notice of the meeting

 Draft scheme of merger and amalgamation


 Report of effect of such merger and amalgamation on each class of shareholder
 Report and valuation
 Other disclosure

While passing the final order, tribunal can make the provision for other required matters.

Section 233:- Merger and Amalgamation of certain companies

Companies include- 2 or more small companies, Holding and its wholly owned subsidiary.
(without nclt kam hojaega)

 Company invites objection/ suggestion from ROC, Liquidators person effected by the
scheme.
 Scheme will be approved by 90% majority
 Full declaration of solvency to ROC (company is fully solvent)
 Scheme is approved by creditors by 90%
 Send scheme to central gov and ROC for objection/ suggestion.
 If any objection then ROC will give it to central gov within 30 days
 If central gov feels like scheme is in public interest and in creditors interest are approved
and send to ROC.
 If central gov feels like scheme is not in public interest and not in creditors interest then
they refer the company to NCLT.

Section 234- Merger and amalgamation with foreign companies.

Normal procedure of 232, additional the approval of RBI is required, manner of payement of
consideration (card, cash, etc)
Section 235- Power to acquire shares of shareholders dissenting from scheme/ contract
approved by the maojority.

 Transfree Company offers to acquire shares of the shareholders of the company and
there can be a shareholder who accepts the offer and shareholder who dissent the
offer.
 If 90% or more accept the offer then the notice to acquire should ne send to the
dissenting shareholder
 If there is shareholders who are against it then the application against the acquisition
to nclt by decenting shareholder
 Application for acquisition to nclt ny transfree company
 Nclt passes an order to transferer the company to register the transferee and order
transfree to pay consideration

Section 236:- Purchase of minority shareholdingi

If acquirer along with person acting in concert holds 90% or more shares offers to buy shares at
value determined by value determined by registred value to remaining shareholders

They should keep money in separate bank account and pay within 60 days

Section 237:- Power of central gov to provide for amalgamation in public interest
(zabarzsti amalgamation strong weak ko)

Central gov give order by notification in official gazette can order amalgamation of
company .Central gov will also give order for

 Pending legal proceeding by or against transferor


 All members have the same interest in transferee company and if there is any difference it
should be compensated.

Section 238:-Registration of offer of schemes involving transfer of shares

Before offer letter given to shareholder that circular for registration should be given by transferee
company to ROC.

Section 239:- Preservation of books and papers of amalgamated company

Books and papers of amalgamated company shouldn’t be disposed off without permission of
central gov.
Section 240:- Liability of officers in respect of offences committed prior to merger and
amalgamation

The liability shall continue even after the merger and amalgamation

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