{"id":2012,"date":"2021-02-05T07:11:41","date_gmt":"2021-02-05T07:11:41","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=2012"},"modified":"2021-02-05T08:59:30","modified_gmt":"2021-02-05T08:59:30","slug":"start-up-companies-into-the-scheme-of-merger-and-amalgamation","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/start-up-companies-into-the-scheme-of-merger-and-amalgamation\/","title":{"rendered":"MCA Allows the Entry of Start-up Companies into the Scheme of Merger and Amalgamation"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Ministry of Corporate Affairs by way of\nNotification No. G.S.R. 93 (E), dated 01.02.2021, has declared an amendment in\nthe Companies (Compromises, Arrangements and Amalgamations) Rules 2016. Such an\namendment relates to the entry of start-up companies into the scheme of <strong><a href=\"https:\/\/swaritadvisors.com\/merger-and-amalgamation\" class=\"text-primary\">Merger and\nAmalgamation<\/a><\/strong>, and will come into force from the date of publication,\ni.e., 01.02.2021.<\/p>\n\n\n\n<p>Further, the amendment is done by way of the powers\nconferred under section 469, together with the sections 230 to 233 and 235 to\n240 of the Companies Act 2013. The said amended regulations will be known as the\nCompanies (Compromises, Arrangements and Amalgamations) Amendment Rules 2021.<\/p>\n\n\n\n<p>In this blog, we will discuss about the provisions\nconcerning the entry of start-up companies into the scheme of Merger and\nAmalgamation.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3ace52e93b8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3ace52e93b8\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/start-up-companies-into-the-scheme-of-merger-and-amalgamation\/#Concept_of_Start-up_Company\" title=\"Concept of Start-up Company\">Concept of Start-up Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/start-up-companies-into-the-scheme-of-merger-and-amalgamation\/#Provisions_Concerning_Entry_of_Start-up_Companies_into_the_Scheme_of_Merger_and_Amalgamation\" title=\"Provisions Concerning Entry of Start-up Companies into the Scheme of Merger\nand Amalgamation\">Provisions Concerning Entry of Start-up Companies into the Scheme of Merger\nand Amalgamation<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/start-up-companies-into-the-scheme-of-merger-and-amalgamation\/#Insertion_of_Sub_Rule_1A_of_Rule_25\" title=\"Insertion of Sub Rule (1A) of Rule 25\">Insertion of Sub Rule (1A) of Rule 25<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/start-up-companies-into-the-scheme-of-merger-and-amalgamation\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/start-up-companies-into-the-scheme-of-merger-and-amalgamation\/#Copy_of_Official_MCA_Notification\" title=\"Copy of Official MCA Notification\">Copy of Official MCA Notification<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Start-up_Company\"><\/span>Concept of Start-up Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For the purpose of the provisions of the said regulations, the term \u201cStart-up Company\u201d means a private company that is incorporated either under the provisions of the <a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_1956\">Companies Act 1956<\/a> or Companies Act 2013, and is recognised by the Notification issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on 19.02.2019.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/reasons-for-mergers-and-amalgamation\/\">Reasons: why you should opt for Mergers and Amalgamation<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Provisions_Concerning_Entry_of_Start-up_Companies_into_the_Scheme_of_Merger_and_Amalgamation\"><\/span>Provisions Concerning Entry of Start-up Companies into the Scheme of Merger\nand Amalgamation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The provisions concerning the Entry of Start-up\nCompanies into the Scheme of Merger and Amalgamation can be summarised as:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Insertion_of_Sub_Rule_1A_of_Rule_25\"><\/span>Insertion of Sub Rule (1A) of Rule 25<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As per this sub rule a scheme of Merger or\nAmalgamation formulated under the provisions of section 233 of the Companies\nAct 2013, can be entered into by the class of companies as follows:<\/p>\n\n\n\n<ol><li>Two or more\nstart up Companies, or;<\/li><li>One or more start-up\ncompany, together with one or more small company;<\/li><\/ol>\n\n\n\n<p>Further, this sub rule is inserted after sub rule\n(1) of rule 25 of the Companies (Compromises, Arrangements and Amalgamations)\nRules 2016.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In\na nutshell, the main reason behind the amendment of the provisions of Rule 25\nof the Companies (Compromises, Arrangements and Amalgamations) Rules 2016 was\nto increase the ambit of the regulations and to provide start-up companies the\nbenefits and flexibility to enter into the scheme of merger and amalgamation. The\nsame will automatically result in the growth and development of these entities.<\/p>\n\n\n\n<p>Further,\nthe said amended rules will be known as the Companies (Compromises,\nArrangements and Amalgamations) Amendment Rules 2021 and have come into effect\nfrom 01.02.2021. <\/p>\n\n\n\n<p>Lastly,\nin case of any other doubt or query, reach out to <strong><a href=\"https:\/\/swaritadvisors.com\/\" class=\"text-primary\">Swarit Advisors<\/a><\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Copy_of_Official_MCA_Notification\"><\/span>Copy of Official MCA Notification<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<a href=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/startup-companies-merger-and-amalgamations-scheme-notification.pdf\" class=\"pdfemb-viewer\" style=\"\" data-width=\"max\" data-height=\"max\"  data-toolbar=\"bottom\" data-toolbar-fixed=\"off\">startup-companies-merger-and-amalgamations-scheme-notification<br\/><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/cross-border-mergers-and-acquisitions-in-india\/\">Cross Border Mergers and Acquisitions in India: A Complete Guide<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Ministry of Corporate Affairs by way of Notification No. G.S.R. 93 (E), dated 01.02.2021, has declared an amendment in the Companies (Compromises, Arrangements and Amalgamations) Rules 2016. Such an amendment relates to the entry of start-up companies into the scheme of Merger and Amalgamation, and will come into force from the date of publication, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2014,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[342,64],"tags":[341],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2012"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=2012"}],"version-history":[{"count":7,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2012\/revisions"}],"predecessor-version":[{"id":2021,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2012\/revisions\/2021"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/2014"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=2012"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=2012"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=2012"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}