M&A Magazine

There have been a lot of mergers/amalgamations over the years where the transferor and transferee companies are registered in different states and have assets in different states. Any Amalgamation is carried out by drafting a scheme detailing the transfer of business in whole for consideration in equity or cash. Currently, the schemes are to be presented to the NCLT of each state where the transferor and transferee companies have its registered office.  Respective NCLT passes the order sanctioning the scheme.  The ORDER , thus passed, is liable to levying of stamp duty . This is where the trouble is right now, payment of stamp duty is fine but the questions of which state should the stamp duty be paid, how much rebate can one get in case of paying stamp duty in both states, paying stamp duty in the respective state as per the value of assets which are transferred is to be considered or the worst to pay stamp duty in all the relevant states without rebate at full amount ap...

The Companies Act 2013 (New Act) , which was substantially made effective from April 1, 2014, has the potential and capability to be a historic milestone for implementing Mergers & Amalgamations (M&A) . So far, the provisions relating to M&A under the New Act are yet to be notified. These are pragmatic reforms for M&A under the New Act, which could make the process easier, faster and cleaner for companies involved in M&A. Some of the highlights include fast track mergers, mergers between Indian Companies and foreign companies and, setting up of National Company Law Tribunal (NCLT) to hear and decide on M&A proposals, cutting down on the probability and scope of objections to M&A’s and easier as well as wider participation of shareholders through postal ballot approval. Chapter XV of the New Act deals with “Compromises, Arrangements, and Amalgamations”, and consolidates the applicable provisions and related issues. The Old Act required M&A to be ...