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From the SelectedWorks of Sreeraj M
January 2007
Merger without the interevention of the Court
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Available at: http://works.bepress.com/sreerajm/1
1
CHECKLIST
ON
MERGER
(Without the Approval of the Court)
By Sreeeraj.M
2
CONTENTS
S.NO
PARTICULARS
P.NOS
1.
General Checklist for Transferor Company
3 - 4
2.
General Checklist for Transferee Company
5
3.
General Information Required From The Company
6
4.
Information/Documents required by the Regional
Director, Department of Company Affairs, in
connection with amalgamation
7
5.
Information required to be furnished to the Auditors
appointed by the Official Liquidator
8 - 9
6.
Information of the transferee company required by the
auditor
10
7.
various forms in the process of Merger/Amalgamation
11-12
8.
Bibliography
13
3
For Transferor Company:
S.NO ACTIVITIES REMARKS
1.
Offer of a scheme or contract from the transferee
company
2.
Irrevocable letter of underwriting from shareholders in
Transferor Company to accept the offer made by the
transferee company.
3.
Form of acceptance of offer
4.
Agreement between the acquiring company and
shareholders holding majority of the shares. (Specimen
Agreement)
5.
Notice of Board Meeting
6.
Minutes of Board Meeting
7.
Notice of general meeting
8.
Form 35A (to be circulated to members)
9.
Minutes of the general meeting
10.
Register of Share Transfers
11.
Register of members
4
12.
Notice sent by the Transferee Company to dissenting share
holders, of acquiring their shares, in Form 35
13.
Duly filled in and executed instrument(s) of transfer of
shares held by the dissenting shareholders
14.
Bank Pass Book or Statement of Account in respect of the
amount deposited in the special bank account to be kept in
trust for the dissenting shareholders.
15.
Annual Return
16.
Balance Sheet as at the date of the take – over supported by
an affidavit from all the directors.
17.
Indemnity bond from outgoing directors.
18.
Resolution passed by the Company for
a. Transfer of Shares
b. Appointment of new directors
c. Acceptance of resignation of directors (outgoing)
and
d. Change in signatories
19.
Execution of special power of attorney to be granted by the
transferor of shares, if the shares are to be transferred after
the expiry of a certain period.
5
For Transferee Company:
1.
Offer of a scheme or contract to the transferor company
2.
Notice of Board Meeting
3.
Agreement between the acquiring company and share
holders holding majority of the shares of the transferor
company.
4.
Minutes of Board Meeting
5.
Notice for general meeting
6.
Minutes of the general meeting
7.
Notice to dissenting shareholders of the transferor
company for acquiring their shares in Form 35.
8.
Duly filled in and executed instruments of transfer for
shares held by the dissenting shareholders.
9.
Register of investments
10.
Letter of Authority to its receiving bankers
11.
Letter of responsibility from a director of the company
12.
Power of attorney from director in favour of other directors
6
General Information required from the Company
1. Relationship between the directors of the transferee and transferor
companies under the Companies Act, 1956
2. Names of the officers of both the transferee and transferor companies
who are to be authorised to sign the Application, Affidavit and
petition. (The companies concerned can appoint authorise any one
person to act on behalf of them, who may be from either of the
companies).
3. Names of the English and regional language newspapers in which
notices are to be published.
4. Names in preferential order as to the chairmen of the meetings of the
transferee and transferor companies. (The chairman in this case need
not be a director on the board of directors of the company concerned
or even a member of the company).
5. List of creditors and their dues. List of individual cases to be given, as
well as categorisation in various slabs.
7
Information/Documents required by the Regional Director,
Department of Company Affairs, in connection with amalgamation
1. Balance Sheets for the last five years of the transferee company.
2. Balance Sheets for last five years of the transferor company
3. Two copies of the valuation report of the chartered accountants.
4. List of top fifty shareholders of the transferee company.
5. List of top fifty shareholders of the transferor company.
6. List of directors of the transferor company and their other
directorships.
7. List of directors of the transferee company and their other
directorships.
8. Number and percentage of NRI and foreign holding in the transferee
and transferor companies.
9. Rights/Bonus/Debentures issues made by the transferee and the
transferor companies in the last five years.
8
Information required to be furnished to the Auditors appointed by the
Official Liquidator
1. Certified true copy of the scheme of amalgamation along with the
petition.
2. Certified true copy of the Memorandum and Articles of Association
of the company.
3. List of shareholders of the company with their share holding Any
changes during the last five years to be indicated
4. Accounts of the company made upto the appointed day of
amalgamation.
5. Address of the registered office of the company
6. Present authorised and paid - up share capital of the company
7. Changes in the Board of directors during the last five years along
with present Board of directors.
8. List of associated concern in which directors are interested
9. List of various appeals pending under Income-tax, Sale Tax, Excise
Duty, Custom Duty, FEMA, etc.
10. Details of loans and advances given to the associated
concern/companies under the same management during the last five
years.
11. Details of revaluation of assets
12. Details of any allegations end/or complaints against the company
13. Details of amount paid to the managing director, directors or any
relative of the directors during the last five years.
9
14. Comparative statement of profit and loss account and balance
sheet for the last five years.
15. Details of bad debts written off during the last five years.
16. List of all charges registered with the Registrar of Companies and
the amount secured against the same.
17. Copy of the latest annual return filed with the Registrar of
Companies along with Annexures.
18. Details of all the subsidiary Companies as under: -
(a) Authorised and paid-up share capital of the company.
(b) List of present shareholders along with details or
changes in the shareholding patterns during the last five
years.
10
The following Information of the transferee company is required by
the auditor:
1. Names of the existing directors of the company.
2. List of common shareholders of the companies involved in the
amalgamation with individual shareholding.
3. Authorised and paid up capital of the company.
4. Copy of latest audited balance sheet
The auditors may also require the following records of the
transferor company for examination
1. Books of accounts and relevant records for
the last five years.
2. Minutes book of Board and General
Meetings.
..
11
Filing of various forms in the process of Merger/Amalgamation
1. (a). When the objects clause of the ‘memorandum of
association of the transferee company is altered to
provide for amalgamation/merger for which special
resolution under Section 17 of the Companies Act, I 956,
is passed; (b) the company’s authorised share capital is increased to
enable the company to issue shares to the shareholders of
the transferor company in exchange for the shares held
by them in that company for which a special resolution
under Section 31 of the Act for alteration of its articles is
passed;
(c) a special resolution under Section 81(1A) of the Act is
passed to authorise the company’s Board’ of directors to
issue shares to the shareholders of the transferor
company in exchange for the shares held by them in that
company; and
(d) a special resolution is passed under Section 149(2A) of
the Act authorising the transferee company to commence
the business of the transferor company or companies as
soon as the amalgamation/merger becomes effective;
the company should file with ROC within thirty days of
passing of the aforementioned special resolutions, Form
No. 23 along with (i) certified true copies. of all the
special resolutions; (ii) certified true copy of the
explanatory statement annexed to the notice for the
general meting at which the resolutions are passed; and
(iii) the prescribed filing fee, for registration of the
resolution under Section 192 of the Act.
12
2. When a special resolution is passed under Section 149(2A) of
the Act, authorising the transferee company to commence the
business of the transferor company or companies as soon as
the amalgamation/merger becomes effective, the transferee
company should also file with the Registrar of Companies, a
duly verified declaration of compliance with the provisions of
Section 149(2A) by one of the .directors or the secretary or,
where the company has not appointed a secretary, a secretary
in whole-time practice in Form No.20A on a non-judicial
stamp paper of the value applicable in the State where the
declaration is executed
3. to file with ROC within thirty days of passing of the special
resolution, Form No. 23 along with (i) certified true copy of
the special resolution approving the scheme of arrangement of
merger/amalgamation; (ii) certified true copy of the
explanatory statement annexed to the notice for the general
meeting at which the resolution is passed; and (iii) the
prescribed filing fee, for registration of the resolution under
Section 192 of the Act.
4. To file with the Registrar of Companies within thirty days of
allotment of shares to the shareholders of the transferor
company in lieu of the shares held by them in that company in
accordance with the shares exchange ratio incorporated in the
scheme of arrangement for merger/amalgamation, Form No.
2 the return of allotment along with the prescribed filing fee
as per requirements of Section 75 of the Act.
13
BIBLIOGRAPHY
1. “GUIDE TO THE COMPANIES ACT” by A.RAMAIYA
2. “COMPANY LAW READY RECKONER” by D.K.JAIN
3. “ ICSI – CORPORATE RESTRUCTURING STUDY
MATERIAL”
4. COMPANIES ACT, 1956 - BARE ACT by TAXMANN
5. http://yourcompanysecretary.com
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