{"id":6968,"date":"2021-07-19T09:18:15","date_gmt":"2021-07-19T09:18:15","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=6968"},"modified":"2021-08-20T11:52:37","modified_gmt":"2021-08-20T11:52:37","slug":"fast-track-mergers-and-amalgamation","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/fast-track-mergers-and-amalgamation\/","title":{"rendered":"A Complete Guide on Fast Track Mergers and Amalgamation"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Performing a Merger or Acquisition is tiresome and challenging in nature, especially if it concerns small entities. To deal with this challenge, the Ministry of Corporate Affairs (MCA) announced fast track mergers on 15 December 2016, and have been given under Section 233 of Companies Act, 2013 read with <strong><em>Rule 25 of the companies (Arrangements, Compromises and Amalgamations) Rule, 2016<\/em><\/strong>. Scroll down to check more information regarding the fast track mergers and amalgamation.<\/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-6a3ab8e183302\" 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-6a3ab8e183302\"  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\/fast-track-mergers-and-amalgamation\/#The_idea_of_Fast_Track_Mergers_and_Amalgamation\" title=\"The idea of Fast Track Mergers and Amalgamation\">The idea of Fast Track Mergers and Amalgamation<\/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\/fast-track-mergers-and-amalgamation\/#Applicability\" title=\"Applicability \">Applicability <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/fast-track-mergers-and-amalgamation\/#Procedure_of_Fast_Track_Mergers_and_Amalgamation\" title=\"Procedure of\nFast Track Mergers and Amalgamation\">Procedure of\nFast Track Mergers and Amalgamation<\/a><\/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\/fast-track-mergers-and-amalgamation\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_idea_of_Fast_Track_Mergers_and_Amalgamation\"><\/span>The idea of Fast Track Mergers and Amalgamation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Companies\nAct, 2013 (Section 233) announced the idea of the fast track merger process,\nwhich furnishes a more simple procedure for Mergers and Amalgamations of\ncertain classes of entities such as small companies, subsidiary and holding\nentities.<\/p>\n\n\n\n<p>According to this process, it permits these entities or companies to experience the <strong><a href=\"https:\/\/swaritadvisors.com\/merger-and-amalgamation\" class=\"text-primary\">Merger and Amalgamation<\/a><\/strong> process easily, rapidly, and within the prescribed time duration. Companies Act, 2013, informs that it applies to all kinds of understandings and compromise that consists of these companies.<\/p>\n\n\n\n<p>When compared with conventional mergers procedure, the new act has made the process easy and simple as it does not further indulge in the judicial process as concerned with the <strong><em>National Company Law Tribunal (NCLT)<\/em><\/strong><sup><a href=\"https:\/\/nclt.gov.in\/\" class=\"text-primary\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>. Further, the entities are now required to take consent from just three regulatory authorities, namely \u2013 Registrar of Companies, Official Liquidator, and Regional Directors.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Applicability\"><\/span>Applicability <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According\nto Section 233(1) of the Companies Act, 2013, the scheme of Merger and\nAmalgamation under the proposed provisions can be entered into between the\nfollowing:<\/p>\n\n\n\n<ul><li>Two or more small entities or\ncompanies;<\/li><li>Holding Company and its\ncompletely-owned subsidiary company;<\/li><li>Other classes of specified\ncompanies.<\/li><\/ul>\n\n\n\n<p>It\nis worth describing here that such class of companies would also be appropriate\nfor out of Tribunal or Court process of arrangement or compromise as per <strong><em>Section\n233 (12) of Companies Act, 2013<\/em><\/strong>. Such arrangement or settlement may be:<\/p>\n\n\n\n<ul><li>Between the creditors and\nCompany or any class of them;<\/li><li>Between the Company and their\nmembers or any class of them.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_of_Fast_Track_Mergers_and_Amalgamation\"><\/span>Procedure of\nFast Track Mergers and Amalgamation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nis the procedure of fast track mergers and amalgamation:<\/p>\n\n\n\n<ul><li>There should be the power to\namalgamate with other entities in the MOA (Memorandum of Association) of the\ncompanies that want to merge. In case no such power is delivered in the MOA (Memorandum\nof Association), then obtain the Memorandum of Association) to be changed to\ninsert the provision authorising the entity to get it combined with other\ncompanies;<\/li><li>The transferee and transferor\ncompanies should prepare the provisional financial statements as of the date;<\/li><li>These entities should also\nprepare the Merger Scheme;<\/li><li>The Meeting Board should be\nconvened to consent to the Merger Scheme. In this meeting, Form CAA 9 should be\ndelivered, which entities should further send it to the Registrar of Companies\n(ROC) and Official Liquidator;<\/li><li>As per Rule 25 sub-rule (1),\nfile notice of proposed scheme to the Registrar of Companies and Official\nLiquidator to invite their refusals or suggestions, if any, in Form CAA-9;<\/li><li>If there are any\nrecommendations or objections, the Registrar of Companies will take thirty days\nto give recommendations or objections;<\/li><li>In case of recommendations or\nobjections from the official liquidator, they will take thirty days to provide\nsuch recommendations or objections;<\/li><li>As per Rule 25 Sub-rule (2),\nDeclaration of Solvency CAA-10 to be filed by the entities with the Registrar\nof Companies;<\/li><li>No Objection Certificate to be\ndated once CAA-10 is filed and before EGM for the final consent of scheme;<\/li><li>Transferee &amp; transferor\nentities should convene the Meeting of Board to call the EGM;<\/li><li>As per Rule&nbsp; <strong><em>25 Sub-rule (3)<\/em><\/strong>, a notice of the meeting\nmust be joined with the Declaration of Solvency and detailed statement, CAA-10;<\/li><li>The objections and merger\nscheme or suggestions&nbsp; attained from the\nRegistrar of Companies and official liquidator, if any, would be deemed in the\nmeeting, and the scheme shall have consented;<\/li><li>As per <strong><em>Section 233 (4),<\/em><\/strong> written\napproval to be attained from the creditors in place of convening the meeting of\ncreditors;<\/li><li>File <strong><em>Form MGT-14 <\/em><\/strong>for the\nsubmission of shareholders resolution;<\/li><li>Intimation should be sent\nconcerning the consented scheme to all the regulatory authorities;<\/li><li>As per Rule 25 Sub-Rule 4(a),\nsubmit Form CAA-11 in Form GNL-a to the Registrar of Companies within seven\ndays after the completion of General Meeting and should comprise a detailed\nstatement as needed in GNL-1. It should be submitted by the transferee only for\nboth the entities;<\/li><li>Submit the Form CAA-11 manually\nto the Regional Director &amp; official liquidator within seven days after the\ncompletion of the General Meeting. It must be submitted only by the transferee\ncompany for both entities;<\/li><li>Regional Director shall send\nthe questionnaire to be answered within seven days by the transferee of the\nCompany;<\/li><li>Once the submission made by the\nentity is deemed, the Regional Director may decline or consent to the scheme;<\/li><li>As per Rule 25 Sub Rule (6), an\norder for the consent of the scheme would be attained in Form CAA-12. The order\ncan be anticipated within sixty days as the limited time for filing the\napplication with the Tribunal for the decline of application is sixty days;<\/li><li>File Form INC-28 for the order\nattained within one month of getting the order for the consent of the scheme.<\/li><\/ul>\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>With fast track mergers and amalgamations, entities have been able to experience the merger and amalgamation process easily, rapidly and within the duration of time fixed. Entities are now required to take consent from Regional Directors, Official Liquidator, and Register of Companies (ROC). <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-merger-and-amalgamation\/\">Procedure for Merger and Amalgamation: A Complete Guide<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Performing a Merger or Acquisition is tiresome and challenging in nature, especially if it concerns small entities. To deal with this challenge, the Ministry of Corporate Affairs (MCA) announced fast track mergers on 15 December 2016, and have been given under Section 233 of Companies Act, 2013 read with Rule 25 of the companies (Arrangements, [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":6969,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[342],"tags":[817],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/6968"}],"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\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=6968"}],"version-history":[{"count":5,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/6968\/revisions"}],"predecessor-version":[{"id":6974,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/6968\/revisions\/6974"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/6969"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=6968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=6968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=6968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}