Consideration for Slump Sale

[CS M Karthick]

Where a Business Transfer Agreement (Slump Sale) has been executed between two companies (Transferor and Transferee), and the consideration is shares of the Transferee to be allotted, can such shares be allotted directly to the shareholders of the Transferor company instead of the Transferor company itself? Is this allowed and valid under the Companies Act, 2013?

[Sujoy Sircar]

This is a demerger. Chap XV of CA 2013 will apply.

Yes shares can be allotted as consideration.

Sujoy Sircar (ACS, LLM)

On Fri, 26 Sep 2025, 10:35 CS M Karthick, <karthic...@gmail.com> wrote:

Where a Business Transfer Agreement (Slump Sale) has been executed between two companies (Transferor and Transferee), and the consideration is shares of the Transferee to be allotted, can such shares be allotted directly to the shareholders of the Transferor company instead of the Transferor company itself? Is this allowed and valid under the Companies Act, 2013?

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[CA Rahul Srivastava]

BTA are different from Demergers. Company are taking this route to avoid regulatory hurdles.

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