The provisions relating to merger and amalgamation are contained in sections 390 to 396a in chapter v of part vi of the companies act, 1956. The demerger of the demerged undertaking of demerged company vesting with the resulting company shall be in compliance with the provisions of section 219aa of. Sub section 19aa of section 2 of income tax act, 1961. Only recently, on december 7, 2016, merger related provisions of the act i. Slump sale vs demerger business transfer agreement. Sections 100103 and other applicable provisions of the companies act, 1956 andor sections 230233 if applicable and other relevant provisions of the companies act, 20, as may be applicable, read with sections 219aa or 242c of the income tax, 1961, as may be applicable, for the i demerger of the. In respect of an order made by the high court under section 394 of the companies act, 1956 in case of merger demerger of companies, stamp duty has been reduced from 3% to 2% in respect of the transfer of property and has been increased from 0. Be it enacted by parliament in the sixth year of the republic of india as follows 1. Even if the composite scheme of arrangement is not a. We acknowledge receipt of your various letters resting dated march 16 2006, forwarding the proposed scheme of aitangement and demerger between yotrr company and sun pharma advanced research company limited and confirmation. The companies act, 20 companies act is one of the landmark legislations enacted in recent years to bring forth transparency, ease of doing business and protecting rights of minority shareholders. Newly introduced simplified procedure for amalgamation or merger between i holding company and its wholly owned subsidiary ii two or more small companies. Amalgamation and demerger bombay chartered accountants. U24111mh1983ptc031424 incorporated on 25111983 under the provisions of companies act, 1956 with omkar speciality chemicals limited company registration.
Sale of the whole or substantially whole of an undertaking in terms section 2931 a of the companies act. Companies act, 1956 and desh chemicals private limited company registration number. The following definition of demerger is excerpted from section 2 19aa of income tax act, 1961 demerger, in relation to companies, means the transfer, pursuant to a scheme of arrangement under sections 391 to 394 of the companies act, 1956 1 of 1956, by a demerged company of its one or more undertakings to any resulting company. Procedure of demerger and checklist for demerger cakart.
Sections 230233, 235240 of the act were made effective which replaced similar provisions of the companies act, 1956 1956 act. Demerger under voluntary winding up and power of liquidator. Demerger appointed date as hereinafter defined after giving effect to part ii of the scheme. If you agree then only proceed to download companies act 20 pdf. The 20 act provides an opportunity to catch up and make our corporate regulations more contemporary, as also potentially to make our corporate regulatory framework a model to emulate for other economies with similar characteristics. Composite scheme of arrangement heritage foods limited. The companies act was, in many ways, perceived as a reaction to the satyam scam which uncovered several aspects of corporate fraud that inter alia diminished minority shareholder rights. Retail undertaking by the demerged company to future retail limited. Set out below are brief details of the networth and turnover of. All the propertyliability of the undertaking becomes the. Income tax calculator new scheme vs old scheme and consent letter for fy 202021. Pdf checklist for demerger devesh pandey corporate. Demystifying corporate restructuring under companies act. What is demerger section 219aa of the incometax act defines demerger as under.
Company in accordance with sections 391 to 394 of 1956 act and in compliance with section 219aa of it act. Companies act, 1956 to reorganize and streamline the business of mastek. The term demerger is not defined under the companies act, 1956. Delhi high court order 18 jan 2017scheme approval hcl. Sections 100 to 104 of the companies act, 1956, section 52 of the companies act, 20 and other applicable provisions of the relevant act as defined hereinafter for. The registered offices of the demergedtransferor company and the.
Scheme of affangement and demerger under section 3991 of the companies act, 1956. Under sections 391 to 394 and sections 100 to 103 of the companies act, 1956 andor sections 230 to 232 and section 66 of the companies act, 20 as applicable and section 52 of the companies act, 20. Applicant company explana t or y st a tement under section 393 of the comp anies act, 1956 1. Applicant company explanatory statement under section 393 of the companies act, 1956. The demerger of the demerged undertaking from the demerged company to the resulting company shall comply with the provisions of section 219aa of the income tax act, 1961 such that.
The demerger should be in accordance with the act by the central government in this behalf which envisages the companies act, 1956. Act, 1956 subsequent to the order of the tribunal dated 23. The original company which has split into several companies after division could be wound up voluntarily pursuant to the provisions of sections 484 to 498 of the companies act, 1956. An act to consolidate and amend the law relating to companies and certain other associations. Furnish to every member entitled to attend the meeting convened by the concerned high court free of charge and within 24 hours of requisition being made in this behalf a copy of the proposed demerger together with a statement required to be furnished under section 393 of the companies act, 1956 unless the same has already been furnished to the member. However, it is covered under the expression arrangement, as defined in clause b of section 390 of companies act. Section 219aa of the income tax act, 1961 defines demerger in relation to companies as transfer, pursuant to a scheme of arrangement under section 391 to 394 of the companies act, 1956 by a demerged company of its one or more undertaking to any resulting company demerger is a term coined to reveal some sort of partition or. Further, the high court observed that the sanction of the scheme, does not in any way bind the tax department to. Companies act, 1956, and having its registered office at 3rd floor, maker chambers iv, 222, nariman point, mumbai 400 021. Amalgamating company 1 has its registered office at 8, balaji estate, first. Demerged business undertaking, or otherwise capable of passing by manual. This scheme of arrangement and reconstruction demerger is presented under. Pdf companies act 1956 and 20 pdf download, high quality.
Production undertaking as defined below of the demerged company and. Any proposal of amalgamation or merger begins with the process of due diligence, as the proposal for merger without due diligence is like entering a tunnel with darkness growing with each step. Companies act, 1956 and has its registered office at krm tower, 8th floor, no. Private public companies with more than 200 members and all listed companies require a postal ballot. Introductions of fast track business merger no such provision. Tribunal issued notice in the second motion petition being c. Demerger of broadcasting business of sabtnlsecond demerged company into tv. The proposed scheme is expected to be beneficial to demerged company and. Definitions of company, existing company, private company and public company 4. Pursuant to the order dated 16th september, 2005 passed by the honble high court of judicature at bombay, in the company. Iiolders and creditors under sections 391 to 394 of companies act, 1956 preamble and reconstruction demerger is presented under this scheme ol. So the structure most suitable structure is to be selected after evaluating strategy, financial implications and other objectives of the company.
Noteworthy rulings on corporate restructuring scheme of. Zee telefilms limited, a company incorporated under the companies act, 1956 having its registered of fice at 5, continental building, dr. Companies act, 1956 and companies act, 20, under corporate identity no. Demerger, case study of larsen and toubro economies. Board of directors in relation to jindal saw, jindal saw residual andor the transferee company, as the case may. Demerger under section 391 to 394 of the companies act, 1956 the primary purpose while going for a demerger is to have focused attention on both businesses. Procedure of demerger and checklist for demerger, check complete procedure of demerger as per new companies act 20.
Case studies and practical aspects of mergers and demergers. Everything you want to know about for procedure of demerger. Retail limited transferee company or demerged company or hfrl and demerger of the. In the matter of the companies act, 1956 1 of 1956. The pdf file you are about to download is not created by writinglaw.