Merger with wholly owned subsidiary

[Sachin Verma]

Dear All 

One of my subsidiary company is going in merger with holding company. We want to do this merger through NCLT route not by fast track merger. So please provide Step by step procedure and checklist if anybody have. 

[Dp SHUKLA]

FAST TRACK MERGER

The Companies Act, 2013 provides a fast track merger for small companies or holding and subsidiary companies.

Fast track Merger process involves approval from the following person:

• Creditors or class of creditors;
• Members or class of members;
• Registrar of companies;
• Official Liquidator;
• High Court.

In this type of merger, there is no need to make an application to NCLT for finalizing the scheme`, in spite of this only 90% of each class of members and creditors must approve the scheme and rest the procedure is same like section 233.

[Dp SHUKLA]

 SECTION-233- MERGER & AMALGAMATION OF CERTAIN COMPANIES:

[Section 233(1)]

It a merger between two or more companies or between holding and its wholly owned subsidiary company subject to the following conditions:

• A notice of the scheme is to be given in Form AMG.12 for inviting objections or suggestions from Registrar or Official Liquidator;
• Approval of scheme after receiving objections/suggestions by members at a general meeting holding at least 90% of total number of shares;
• Filing of declaration of solvency in Form AMG. 13 by the merging companies with the registrar;
• Approval of scheme by 9/10th in value of the creditors or class of creditors in the general meeting convened by giving 21 days notice along with the scheme

[Section 233(2)]

Filing a copy of approved scheme in Form AMG. 14 along with the report of the result with the Central Government, Registrar and Official Liquidator.

[Section 233(3)]

If there is no objection to the Registrar or Official Liquidator then Central Government after registering the same will issue the confirmation in Form AMG.15.

[Section 233(4)]

If there is any objection to the Registrar or Official Liquidator, communicate this to Central Government within 30 days.

[Section 233(5)]

After receiving opinion of Central government that scheme is not in public interest or creditors’ interest, file an application before Tribunal within 60 days to consider scheme.

[Section 233(6)]

After receiving application from Central Government if Tribunal is of the opinion to consider the scheme again, it may direct accordingly to modify scheme or confirm scheme by passing such order.

[Section 233(7)]

The confirmation order of the scheme issued by the Central government or Tribunal shall be filed with the Registrar in Form AMG.16 and after registering it will issue a confirmation to the companies.

[Section 233(8)]

Dissolution of Transferor company without process of winding up after registration of scheme with the Registrar.

[Section 233(9)]

Effects after Registration of Scheme:

• Transfer of property or liabilities of the Transferor company to the Transferee company ;
• Charges of Transferor company shall become charges of Transferee Company;
• Legal proceedings of Transferor company shall continue by or against Transferee company and;
• If any amount unpaid by dissenting shareholders shall become liability of Transferee company.

[Section 233(10)]

The Transferee company shall not hold shares in its own name or in name of its subsidiary or associate company and if there will be any such shares they will stand cancelled or extinguished on the merger or amalgamation.

[Section 233(11)]

The Transferee company shall file an application along with such fees as may be specified on the revised authorized capital.

[Section 233(12)]

The provisions under this section shall apply as it is to the companies referred in section 230 or in section 232.

[Section 233(13)]

The Central government may provide for merger or amalgamation of companies in such manner as may be prescribed.

[Section 233(14)]

Companies covered under this section may use the provisions of section 232 for the approval of any scheme.

On Friday, 20 October 2017 16:28:07 UTC+5:30, Sachin Verma wrote:

[Sachin Verma]

Dear All

Thanks for reply but Please share the procedure with NCLT . We want to go with NCLT route not by fast truck. there are some reason

So please provide procedure through NCLT route

[GIRISH KUMAR]

Hi,

Here is the procedure to do merger:

1. Calculate swaps ratio of both the companies

2.Hold bm and take approval for swaps ratio, scheme, authorisation to any one of the directors to do sign, approval for appointment of CS/ advocate to appear before NCLT.

3. Draft nclt-1, nclt-2 affidavit, memorandum of appearance, affidavit from shareholders  and creditors for consent for dispensation of meeting of shareholders and creditors etc

4 annexure

5 file with NCLT with dd rs.5000/-

Once dispensed the meeting we need file petition for approval of scheme

Publishing in news papers

Approval of ROC, Rd official liquidator's etc

Approval of NCLT

Filing gnl-1 , inc- 28 etc

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