A Merger is defined as a deal between companies, creditors and shareholders in order to merge two separate companies into one. Under Income Tax Act, 1961, section 2(1b) defines amalgamation as combining two or more than two companies to altogether create a new entity or company.
Under the Indian Law, Section 390 to 396A of Companies Act, 1956 and Section 230 to 240 of Companies Act, 2013 covers the provisions for Merger and Amalgamation. The Company Law since last 55 years has been administered and controlled by the Companies Act, 1956. The introduction and enactment of Companies Act, 2013 came as a positive step towards rejuvenating the current legal process in order to facilitate better governance and fulfill the requirements of companies.
One can easily seek a corporate lawyer for availing legal assistance regarding mergers and amalgamation in Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Pune, Goa, Kolkata, Ahmedabad, Gurgaon or Noida.
Under this Act, only inbound merger i.e. foreign company merging into an Indian company was allowed but outbound merger i.e. Indian company merging into foreign company was not permitted.
Both inbound as well as outbound company merger is allowed.
Disclosures Tribunal held the power to approve any arrangements or compromise with members and creditors if they are satisfied that any person or company have disclosed all the documents, facts, affidavits, financial statements, auditor’s reports, etc… along with the application. Tribunal will not sanction or approve any arrangements or compromise unless the company’s auditor has filed a certificate with Tribunal confirming to the accounting standards stated under Section 133 of the Act. Additional disclosures are mandatory if the scheme belongs to corporate debt restructuring or reducing share capital.
It believes in non-disclosure of valuation report due to better corporate governance and transparency. It is mandatory to accompany a meeting notice developed by an expert along with the valuation report.
Fast Track Merger Non-existence Introduction in this Act in order to speed up mergers.