No Prior Approval is needed from NCLT or High Court for Merger for certain categories of Companies.-Fast Track Merger as per section 233 of companies Act 2013.

No Prior Approval is needed from NCLT or High Court for Merger for certain categories of Companies.
Fast Track Merger as per section 233 of companies Act 2013.

As per MCA Notification date 15th December 2016

The Companies Act 2013 has incorporated the provisions regarding the merger of or  amalgamation between two or more Small Companies or between a holding company and its wholly owned subsidiary company in a fast track basis thereby superseding the provisions of section 230 and 232 (ie National Company Law Tribunal (NCLT) route . 

Definition of   Small Companies:

As depicted in section 2(85) of the companies act 2013 'small company' means a company other than a public company having 

a. Paid up share capital does not exceed 50 lakhs or such higher amount as may be prescribed which shall not be more than 5 crores rupees

                                                          OR

b. Turnover as per last profit and loss account does not exceed 2 crores rupees or such higher amount as may be prescribed which shall not be more than Rs 20 crores.

Steps Involved in Fast-Track Merger Scheme

1. Calculation of Swap Ratio and Preparation of Draft Scheme of Amalgamation   

2. Approval from Board of Directors for the Draft Scheme of Amalgamation & swap ratio (to be considered in a board meeting only)   

3. Send Notice of the proposed Scheme of Amalgamation to Registrar & Official Liquidator inviting for the Objections and Suggestions from ROC & OL.  

  

4 Obtaining consent of the Scheme by Shareholders holding not less than 90% of the total number of shares. Incorporate the objections and suggestion by ROC in the scheme   

5 Obtaining consent of the Scheme by the creditors holding not less than 9/10 in value of total creditors.    

6 File a Declaration of Solvency in the prescribed form with the Registrar of Companies (ROC)   

7 Wait for the objections and suggestion from ROC & OL regarding the scheme. If no such objection is received within 30 days then it will be considered as deemed approval   

8 ROC will send the confirmation to the companies  

9 Transfer the specified Assets and liabilities from transferor Company to Transferee Company   

10 File an application with the ROC along with the scheme registered indicating the revised authorised capital