Meeting of members is compulsory under section 233 or Consent of member on affidavit is sufficient for approval of merger

[Rohit Raghav]

Dear all,

I want to know that whether we can go for merger u/s 233 by obtaining consent in writing on affidavit from 100% members instead of holding EGM 

Kindly clarify all my senior's 🙏

[Arun Kumar Maitra]

No, you cannot replace the mandatory Extra Ordinary General Meeting (EGM) with written consents on affidavits from 100% of members for a merger under Section 233 of the Companies Act, 2013. 

While Section 233(1)(d) explicitly allows creditors to provide their approval "otherwise in writing" (dispensing with a formal meeting), Section 233(1)(b) specifically mandates that the scheme be approved by members "at a general meeting". 

Key Legal Constraints:

• Mandatory Meeting for Members: Unlike the flexibility given to creditors, there is currently no provision in the Act or Rules to dispense with the meeting of members, even if all members provide written consent.
• Approval Threshold: The scheme must be approved by members holding at least 90% of the total number of shares at that general meeting.
• No Circular Resolution: Per Section 175 of the Act, the scheme cannot be approved through a resolution by circulation; a physical or video-conference meeting is required.
• Regulatory Purpose: The meeting is also intended to consider any objections or suggestions received from the Registrar of Companies (RoC) or Official Liquidator (OL) following the initial notice in Form CAA-9. 

Practical Differences in Consent

Stakeholder Group	Meeting Required?	Written Consent (Affidavit) Option?
Members/Shareholders	Yes (Mandatory EGM)	Not permitted as a substitute for EGM
Creditors	No (Can be dispensed)	Yes, if representing 9/10th in value

If you proceed without holding a formal EGM, the Regional Director (RD) may reject the scheme for non-compliance with the statutory procedure, as seen in various NCLT rulings where lack of a formal meeting or failure to meet the specific 90% threshold led to rejection.

CA CS ArunKumar Maitra

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[Rohit Raghav]

Thankyou sir 

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[Gopal Rathnam]

EGM is mandatory. Even Paper meeting is OK if it is a private company. If any shareholder is abroad and their presence is required legally for merger resolution,  you can take a Power of attorney and legally hold the EGM.  I do not see any issue in holding EGM

Regards, 

M.GopalRathnam

Company Secretary

Res :D-1106, Mantri Elegance, Bannerghatta Road, Bangalore 560076.

Mobile 9886618696

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