M&A Magazine

Provisions of Compromises, Arrangements, Amalgamation and Reconstruction are dealt in the Companies Act, 2013 under sections 230-234. Amalgamations are also treated in the LLP Act. 2008. But there is no explicit mentions for dealing with merger of LLP into Company or other way around. We look at the decision of NCLT Chennai Bench which shall set a precedent in cases of merging of LLP into companies. M/s Real Image LLP vs. M/s Qube Cinema Technologies Pvt Ltd, NCLT Chennai Bench In a merger filing made before the Chennai Bench of NCLT, Judicial Member CH. Sharief Tariq was tasked with just one question, “...whether a Limited Liability Partnership (LLP) can be allowed to amalgamate with a private limited company under a scheme of amalgamation filed before the NCLT” Decision of NCLT, Chennai Bench shall set a precedent for such M&As going ahead. In answering the above question, Judicial Member observed that the legislative intent behind enacting both the LLP Act, 200...

Section 66 of the Companies Act, 2013 allows companies to reduce their share capital. The scheme of Reduction of share capital is undertaken by companies in the following manner: Company can extinguish or reduce its liability on its unpaid share capital. Company can extinguish or reduce its liability on its paid share capital by cancelling it which is lost or which is not representing its available assets. Company can even pay off to its shareholders excess paid-up capital received from them if that is not required to the Company. Companies opt for reduction of their share capital either to create/ increase distributable reserves for them or to reduce their accumulated losses. Sagar Soya Products Limited , a company listed on Bombay Stock Exchange has proposed reduction of its share capital under section 66 of the Act. The present equity paid up share capital of the Company is Rs. 5,85,16,890 divided into 5851689 equity shares of Rs. 10/- each. The Company is into the bus...