From the SelectedWorks of Sreeraj M

January 2007

Merger without the interevention of the Court

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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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