3 mr p.k. vijay corporate professional
TRANSCRIPT
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10/25/2013
FAST TRACK MERGERS UNDER
COMPANIES ACT, 2013
A BOON FOR SIMPLIFIED INTERNAL
RESTRUCTURING
New Delhi
October 24, 2013
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TYPES OF MERGER (INCLUDES DEMERGER)
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TYPES OF MERGER (INCLUDES DEMERGER)
Scheme of Arrangement ( Section 230 )
Merger / Demerger of Companies ( Section 232 )
Fast Track Merger - Merger of Small Companies
and Merger between Holding and Wholly - owned
Subsidiary Company (Section 233)
Cross Border Merger – Merger between Indian
Company and Foreign Company (Section 234)
Merger in public Interest by Central Government
(Section 237)
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HIGHLIGHTS OF M&A UNDER COMPANIES ACT 2013
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HIGHLIGHTS OF THE M&A UNDER COMPANIES ACT, 2013
NCLT to assume jurisdiction of the High Court
Both Inward & Outward Merger / Demerger between Indian
Company and Foreign Company is enabled;
Voting through meeting or Postal Ballot as may be directed
Minimum Shareholding / Debt Ownership limit prescribed for
objecting scheme
Treasury Stock Prohibited
Exit opportunity to Dissenting Shareholders
Disclosures Convening meeting increased
Yearly statement to be submitted for implementation of
scheme
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FAST TRACK MERGER & DEMERGER U/S 233
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FAST TRACK MERGER & DEMERGER U/S -233
Section 233 provides permits fast track Merger/
Amalgamation between:
Two Small Companies (Only Small Companies no
exemption to Small Public Companies)
A Holding Company and a wholly owned Subsidiary
Companies (All Types of Companies)
Such other classes of companies as may be prescribed.
(Yet not p rescr ibed by MCA)
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DEFINITIONS
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Small Company –
Sectio n 2(85)
Private Company
Paid Up Cap < Rs. 50 Lakhs
> 5 crore
Turnover < Rs. 2
Crores > 20 Crores
Excludes
Holding co Subsidiary Co Not for Profit Co.
Definitions
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Definitions
Subsidiary –
Sectio n 2(87)
Holding Co
Control the composition
of Board
Ownership of
more than 50%
of share Capital
On its own Or together with
one or more of
its subsidiary
OR
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Share Capital –
Sect ion 43
Share Capital
Equity Share Capital Preference Share Capital
Definitions
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Declaration Of Solvency
Declaration of Solvency
is a written declaration
stating that the directors have made an inquiry into the affairs of the
company
and have formed the opinion that the company is solvent
and will be able to pay its entire liability.
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STEPS INVOLVED IN FAST TRACK MERGER
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STEPS INVOLVED IN FAST TRACK MERGER
Approval of Board of all the CompaniesInvolved
A notice of proposed Scheme inviting
Objections or Suggestions, if any,
•From the ROC
•Official Liquidators (OL)
•persons affected by the scheme
•within Thirty Days of Approval is issued by
the transferor company and the transferee
company;
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STEPS INVOLVED IN FAST TRACK MERGER
Transferor & Transferee Companies will give General
Meeting Notice to
• Members
• For approval and considering any objection and
suggestion received from ROC / OL.
• Members holding at least 90 Percents of Total
Share Capital of the Company will approve the
scheme and ;
• Creditors
• Creditors h av in g majo rit y r ep res en tin g n in e-
t en th s i n val ue will approved the scheme;
Transferor & Transferee Company has to File
Declaration of Solvency in Form No. 15.12 with
ROC before the meetings of Members & Credit ors;
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STEPS INVOLVED IN FAST TRACK MERGER
The Transferee Company shall, w ith in s ev en d ay s after the conclusion of the
meeting(s) ;
• File in Form No. 15.13 a copy of the approved scheme
• along with report of the result of each of the meetings
• with the Central Government / ROC / Official Liquidator (OL)
S S O S C G
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STEPS INVOLVED IN FAST TRACK MERGER
ROC / Official Liquidator (OL) will communicate objection and suggestions inwriting to the Central Government within a period of Thirty Days;
No objection of
ROC/OL/CG then CG
shall issue in Form No.
15.14, a confirmation
order
If there is any objection by ROC/OL
then confirmation order issued by C.G
or Tribunal, shall be filed by Transferor
and Transferee Companies in Form
No. 15.15 with the ROC.
If it is not approved by
C.G. the same shall bereferred to NCLT
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Submission of Information through Forms
S b i i f I f ti th h F
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Submission of Information through Forms
DECLARATION OF SOLVENCY
Form No 15.12
Details about Company
ATTACHMENTS :
Copy of Board Resolution
Statements of Assets and Liabilities
Auditors Report on the statement of assets and liabilities Annexure of Assets and Liabilities with Book Value and estimated
Realisable value
S b i i f I f ti th h F
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Submission of Information through Forms
NOTICE OF APPROVAL OF THE SCHEME OFMERGER
Form No 15.13
Details about Transferor & Transferee Company
Details about the approval of the scheme from members / creditors of
Transferee & Transferor Company
ATTACHMENTS :
Copy of the scheme approved by both creditors and members
Notice as per 233(1)(a)
S b i i f I f ti th h F
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Submission of Information through Forms
CONFIRMATION ORDER
Form No 15.14
The Central Govt. shall issue this after approval.
S b i i f I f ti th h F
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Submission of Information through Forms
CONFIRMATION ORDER FOR SCHEME OFMERGER
Form No 15.15
Details about Transferor / Transferee Company
ATTACHMENTS :
Certified Copy of the confirmation order along with the approve scheme.
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RELAXATION NORM & BENEFIT FOR FAST TRACK MERGER
RELAXATION NORM & BENEFIT FOR FAST TRACK MERGER
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RELAXATION NORM & BENEFIT FOR FAST TRACK MERGER
No need to file Notice to other statutory authority
like RBI, Income Tax etc.
Less time Consuming
Give boost to internal Restructuring
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ISSUES INVOLVED
ISSUES INVOLVED
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ISSUES INVOLVED
There is no clarity whether Fast Track Merger will be effective prior to NCLT
become operational or not.
If CG transfer the Scheme to NCLT then, it will fall under Normal merger and
once again entire processes have to be followed as per NCLT order.
Scheme is to be approved by shareholders holding 9/10th value of shares
capital .
Scheme is to be approved by creditors having majority in no. and holding
90% value.
THANK YOU
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THANK YOU
Pavan Kumar Vijay
(Chairman, ASSOCHAM National Council on M&A)
Mob. +91 9810032568
Landline. 011 40622202
E-Mail: [email protected]