Guide to Mergers, Amalgamations and Takeovers

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Description
Corporate restructuring continues to be an area of significant interest for businesses, primarily achieved through Schemes of Merger, Amalgamation and Arrangements as governed by the Companies Act, 2013. These processes are outlined in Chapter XV, covering sections 230 to 240 along with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
The law regulating such schemes is largely procedural and requires strict compliance with the Act and relevant rules. Following the enactment of the Companies Act, 2013, the authority to approve such schemes was vested in the National Company Law Tribunal (NCLT), which has jurisdiction over the registered office of the companies involved.
Section 233 of the Act introduces a Fast Track Approval process for mergers and amalgamations for specific classes of companies, including (a) two or more small companies; or (b) a holding company and its wholly owned subsidiary company/ies, (c) two or more startup companies; or (d) a start-up company with a small company. In such cases, the authority to approve the scheme lies with the Central Government, powers delegated to the Regional Director of the Ministry of Corporate Affairs. The fast-track route provides less paper work as compared with the Tribunal approval, is cost effective and takes less time compared to NCLT approvals.
The Registrar of Companies, Official Liquidator, Regional Director, play a significant role to provide their report to the NCLT. Additionally, comments/objections from authorities like the Income Tax, regulating bodies such as SEBI, RBI, RERA, IRDA etc. where applicable, must be satisfactorily addressed by the petitioner companies.
The valuation of the companies and shares swap ratio play a crucial role in the approval of these schemes. Moreover, the interests of creditors and employees of the transferor companies must be safeguarded during the drafting of the Scheme.
Questions about mergers, demergers, takeovers, capital reduction, and share buybacks have become increasingly common, especially demergers, have seen significant developments over the past 10 to 15 years. It is noticed that mergers and amalgamation and scheme of arrangement specifically for demerger have become more frequent than the past with the fact that corporate restructuring has rapidly spread across the modern world.
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Contents
Chapter 1. Compromises, Arrangements and Amalgamations
Chapter 2.  Compromise or Arrangements
Chapter 3. Enforcement of Compromise or Arrangement
Chapter 4. Merger and Amalgamation
Chapter 5. Merger or Amalgamation of Certain Companies on Fast Track Route
Chapter 6. Merger or Amalgamation with Foreign Company
Chapter 7. Acquisition of Shares of Dissenting Shareholders
Chapter 8. Purchase of Shares from Minority Shareholders
Chapter 9. Amalgamation in Public Interest
Chapter 10. Scheme Relating to Transfer of Shares
Chapter 11.  Preservation of Books & Papers
Chapter 12. Offences Committed Prior to Merger
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Author Details
Dr. D.K. JAIN, M.Com, PCS, ACIS (UK), Ph.D., IP is a Practicing Company Secretary, engaged in the practising field of Company Law, Insolvency and Bankruptcy Law, LLP, SEBI and Stock Exchange compliances. He has more than 32 years of practical experience in corporate laws and has been in the profession of Company Secretary for over 23 years. Dr. Jain is qualified as Insolvency Professional of the Insolvency and Bankruptcy Board of India and having international professional qualification of Chartered Secretary from the Institute of Chartered Secretaries and Administrators (UK) and is a Fellow Member of the Institute of Company Secretaries of India. He has completed research work on Generally Accepted Accounting Principles and its effect on final accounts (a comparative study of GAAP of India, UK and USA).
CS. ABHA JAISWAL, B.Com, LLB, ACS, ACIS (UK), aged about 28 years, is working as Deputy Manager cum Company Secretary with Bridgestone (India) Private Limited, Pithampur, (M.P.). She is a law graduate, Associate Member of the Institute of Company Secretaries of India and Chartered Secretary from the Institute of Chartered Secretaries & Administrators (UK). She has more than seven years working experience in the field of Corporate Law, SEBI, Stock Exchange & Legal.
CS. Abha Jaiswal has authored a book on Micro, Small & Medium Enterprises Development Act, 2006 which is well received. She has also revised Bharat's Guide to Deeds and Documentation by R.K. Gupta and is also a revising co-author of Bharat's Company Resolutions, Notices, Meetings and Minutes of K.V. Shanbhogue since 8th Edition. She has also assisted Dr. C.K. Jain, a renowned Author and Practicing Company Secretary, in authoring his several professional books. She also has a flavour to write articles and has participated in various quizzes published in ICSI Journals.