Merger of Holding Co and its Subsi

[Sakshi Vaid]

Dear Learned members,

 

An unlisted public co. wishes to merge its wholly owned subsidiary(public co.).Kindly refer any case law,sections,rules,regulations in this regard.What are the issues which may arise?

I have read in some of the discussions about Cross Holding where the Holding co.  has to adjust its shares of the subsi during the merger.

 

Please advice.

 

Admininstrator: just want you to confirm that all are receving this mail in the group.This is so because none of the members replied for my previous queries also.

 

Regards

Sakshi Vaid

[ACS Poonam Jain]

Well in that case i have seen that in Scheme of merger itself no new shares are to be issued to Holding Co as the merging companies are WOS of Holding Co..

 

However Other views also solicited..

Sakshi Vaid

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Regards

Poonam.

[ramela rangasamy]

Dear Sakshi Vaid,

Are you asking for merger of Holding Company with its subsidiary?

If it is merger of Subsidiary with Holding Company, find attached order passed by Delhi HC order for your reference.

R.Ramela

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From: Sakshi Vaid <sakshi...@gmail.com>
To: csmy...@googlegroups.com
Sent: Thursday, 23 February 2012 2:47 PM
Subject: [CSMysore] Merger of Holding Co and its Subsi

[Sakshi Vaid]

Dear Poonam Ji

 

many thanks fo repl.can u rprovide any draft schemen?

[ramela rangasamy]

In case of merger of a subsidiary company with Holding Company, issue of shares towards consideration does not arise. The investment by Holding company in the books of subsidiary as capital gets cancelled.

R.Ramela

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From: ACS Poonam Jain <cspoon...@gmail.com>
To: csmy...@googlegroups.com
Sent: Thursday, 23 February 2012 2:54 PM
Subject: Re: [CSMysore] Merger of Holding Co and its Subsi

[Sakshi Vaid]

Thnaks a lot Mr.Ramela,

 

But can u provide with a draft scheme also?

are their any case laws or sections u can refer to? which shall ease me to make a plan of action for this merger.

 

KInd Regards

Sakshi Vaid

 

On Thu, Feb 23, 2012 at 2:54 PM, ACS Poonam Jain <cspoon...@gmail.com> wrote:

[Rama Murthy]

Dear All

I find that the answers to many of the queries are confined only to company law. In actual practice, one needs to consider the implications of tax laws and various other laws to take a balanced view.

For example, in this case, a stand alone solution under the Companies Act is not suffice. If there are carry over losses, the combined entity should be able to carry over and set off the losses against its taxable future profits. 

Going forward, I would request all concerned to post queries with facts and figures. Needless to say, it would carry a lot of weight to make the analysis tougher and interesting with a view to get a practical solution. 

Regards

Ram 

[Sakshi Vaid]

i completely agree with u Mr.Ram..i am very much looking forward to gain more information on it and thats why seeking help of the learned mmbers.

[ramela rangasamy]

The following are the common provisions that required to be complied with in connection with Merger:

(a) Section 391 to 394 of the Companies Act, 1956;

(b) Rule 67 to 81 of the Companies (Court ) Rules, 1959;

(c) Income Tax - Section 47  and also go through up to 50C and Section 2(1B), 72A read with Rule 9C and all its related sections.

(d) Accounting Standard AS 14.

For case laws you may refer to company cases, on each edition, many cases are reported and you can view the scheme on doing inspection from the MCA portal.

R.Ramela

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From: Sakshi Vaid <sakshi...@gmail.com>
To: csmy...@googlegroups.com

Sent: Thursday, 23 February 2012 3:37 PM
Subject: Re: [CSMysore] Merger of Holding Co and its Subsi