Fast Track Mergers (S.233)

Question 1

What are the important provisions relating to fast track mergers?

Answer 1

S.233 of the companies act 2013 read along with Rule 25 of the Compromise Companies (Compromises, Arrangements and Amalgamations) Rules.

Question 2

Who can opt for the process of fast track merger?

Answer 2

Small companies
Startups
holding
wholly owned subsidiary companies.

Question 3

What is definition of Small company?

Answer 3

1.A company with a paid share capital less than or equal to 4 crores (previously it was 50 lakhs
2. Turnover as per its P)L account immediately preceding financial year shall not exceed 40 crores

Question 4

What are the procedures that are to be followed for approval fast track merger?

Answer 4

1. Approval of R.D
2. Board should meet and approve the scheme
3. declaration of solvency is mandated
4. list of shareholders and creditors should be given
5. Latest financial report of the company to be provided
6. should notify ROC of the respective state
   7.certificate of statutory auditors required (s.247)

Question 5

How many creditors should approve the scheme

Answer 5

the scheme should be approved by 9/10th of creditors or class of creditors in VALUE of respected companies.

Question 6

What is the notice serving requirements for fast track mergers?

Answer 6

1.Notice to be given before 21 days to creditors for approving the scheme.
2.A notice should be sent to the ROC and official liquidator. within 30 days they should object to the scheme if any. Notice to be in the form of CAA9