Compromise, Reconstruction, Amalgamation & Mergers(Module 5)S 230 to 240 NDK

Compromise, arrangement & amalgamation S 230 to 235-power to acquire shares of shareholders dissenting from
240) scheme or contract approved by majority : within 4 months
230-Power to compromise or make arrangements with after making offer by transferee co approval by not <
creditors & members-discloure-Notice-proxy in 30 D- 9/10th in value of shares anytime within 2 month after
Vote-objections by !<10% of holding or outstanding expiry period of 4 M give notice to dissenting share
debt !< 25%-Document to CG/SEBI/IT/Stock holders that it desires to acquire his shares-unless
exchanges/Official liquidator-Majority ¾ of value of application made to NCLT trasfree co wihtin1month
creditors or members-Order binding-no sanction by from date of notice NCLT order transfer of shares-if no
NCLT unless auditor certi. order by NCLT transferee co shall within1 month send
231-Power of tribunal to enforce compromise or notice to transferor co with instrument of transfer to be
arrangements-power to supervise/directions by executed on behalf of shareholders-within 1 month
NCLT-if unable to pay debt order for winding up register the transferee co as holder of those shares and
deemed to be made u/s 273 within 1 M dissenting share holders receive amount
232- Merger & Amalgamation of co-In amalgamation payable by transferee co. and it should be disbursed
transferor co sized to exist & transferee co will within 60 days to share holders.
takeover-may involve more than 1 co-Separation or 236- Purchase of minority shareholding: holder of 90%
joint application-application u/s 230 includes share capital shall notify co of their intention to buy
amalgamation & merger with reconstruction & remaining shares at a price determine based on
part of assets/liabilities required to be transfer, valuation by valuer –majority should deposit amt in
NCLT may call meeting –Calculation-draft of account for 1 year and disbursed to minority within 60
terms- report adopted by days. Transferor co will act as Agent for receiving and
directors/Sharehoders/KEM promoters etc- paying to minority. If no physical delivery, then share
valuation/expert report- NCTL may order transfer cancel
to transferee co-transferee co shall not hold any 237-Power of CG to provide for amalgamation of co in
share own name or trust name or subsidiary all public interest: if CG satisfied, CG may notify-legal
such shares should be extinguished or cancelled- proceeding will continue by or against transferee co-
employee transfer-transferor co to be dissolved & every member will have nearly same interet/rights
fee set off-auditor certificate must before order-file against transferee co as he had. – if less rights entitle to
copy with ROC in 30 D.-if contravene by co !< 1 compensation to that extent-if objections to
lakh >=25 lakh & officer 1 Y or fine !< 1 lakh >=3 compensation, may in 30 days appeal to NCLT and
lakh. U/s 232(3) After conclusion of meeting compensation will be made by NCLT. Copy of order to
conducted by chairman appointed by NCLT shall house of parliament.
file report. Co who have proposed shall file 2nd 238-Registration of offer of scheme involving transfer of
application furnishing details of scheme. shares: for transfer to transferee u/s 235, every circular
233- do—Certain companies :Small co-notice- containing offer and recommendations to members of
objections/suggestions 90% by 90% of holder of transferor co by its directos to accept such offer shall be
shares-if no objections communicate to CG in 30D- accompanied by such information with statement by or
if CG find that it is not In public or creditors behalf of transferee co disclosing steps to be presented
interest it may file before NCLT in 60 D. NCLT before ROC
may Consider u/s 232-copy of order to ROC–effect 239-Presetvation of books & papers of amalgamated
of dissolution without process of winding up-legal companies: no disposal without prior permission of CG.
process against transferor co if pending shall It will appoint for examination
continue-apply mutatis mutandis 240- Lia of officers for offences committed prior to
234- do with foreign company: apply mutatis merger/amalgamation -transferee co will be liable for all
mutandis-prior approval of RBI offences before