Presently, the High Court enjoys powers of sanctioning amalgamation matters under section 394 of the Act though it is a matter of time when this power will be exercised by National Company Law Tribunal, a forum where Chartered Accountants shall be authorized to appear.
Not losing sight of this opportunity coming way of the Chartered Accountants, the seminar on this very topic, assumes greater significance and it is imperative that professionals like Chartered Accountants should keep themselves informed of the provisions relating to merger and amalgamations.
Amalgamations and Mergers under Companies Act 1956 In general, amalgamation is the process of combining or uniting multiple entities into one form.
Whereas Merger means the combining of two or more entities into one, through a purchase acquisition or a pooling of interests.
Where application section 391(1) is considered, The Calcutta High Court has held that no notice to Central Government is necessary.
However, Allahabad High Court has held that in such a matter both the Central Government and the Shareholders of the company is entitled to be heard before any decision is made under this section.
The provisions relating to merger and amalgamation are contained in sections 391 to 396A in Chapter V of Part VI of the Act.
A Foreign company which is an unregistered company is a ‘company’ under this section .
The court can order an amalgamation of the Indian undertaking of a foreign company with an Indian Company.
Where both companies have their registered office in different states, each company shall move to the respective High Court for directions. The certified copy of the order of the High Court shall be filed in form no. as approved by High Court is implemented a s per direction of the High Court by issue of suitable notice to the shareholders. Convene a Board meeting and pass Board resolution for allotment of shares to the shareholders of the transferor company in exchange of shares held in the transferor company and fixing of record date for the purpose. Provisions of this section confer wide powers and authorities in the Courts to enforce and make effective a compromise or an arrangement. The provisions of section 6 of Specific Relief Act 1963 cannot override the provisions of section 391and 392 of the Act. : INFORMATION AS TO COMPROMISES OR ARRANGMENTS WITH CREDITORS AND MAMBERS.
21 with filing fee with the Registrar of the Companies. A copy of every order must be annexed to every copy of the memorandum of association issued after the certified copy of the said order has been filed with the Registrar of Companies. Supervisory powers are given to the court to ensure the carrying out of the compromise or arrangement. Notice given for the meetings of members of members, creditors or any class of them should contain explanatory statements giving the particulars of compromise and arrangement and their effects, Further it should indicate material interest of Directors, Managing Directors, or Manager as such or as shareholders or Creditors.