Merger under IBC

This query is : Resolved

Lakshmi (Querist)
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06 February 2023 Sirs,

Any checklist available for the mergers after the approval of resolution plan in NCLT (under IBC). What all provisions to be followed as per companies act and what all forms to be filed.

Kindly give some inputs. Thank you

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 Certainly! After obtaining approval of the resolution plan in NCLT under the Insolvency and Bankruptcy Code (IBC), there are several provisions under the Companies Act and other regulations that need to be followed for completing the merger. Here’s a checklist and overview of the steps typically involved:

### Checklist for Merger After NCLT Approval (Under IBC)

#### 1. Compliance with NCLT Order
- **Review NCLT Order:** Carefully review the NCLT order approving the resolution plan. Ensure all conditions and directions are understood and complied with.

#### 2. Compliance with Companies Act, 2013
- **Board Meetings:** Convene board meetings of both transferor and transferee companies to approve the scheme of merger.
- **Shareholder Meetings:** Convene meetings of shareholders to approve the scheme of merger through special resolutions.
- **Approval of Authorities:** Obtain necessary approvals from regulatory authorities, if any, depending on the industry or sector.

#### 3. Preparation and Filing of Documents
- **Form Filing:** Prepare and file necessary forms with the Registrar of Companies (RoC) and other authorities as required under the Companies Act, 2013.
- **Form MGT-14:** For filing resolutions and agreements related to mergers.
- **Form INC-28:** For amalgamation of companies.
- **Form INC-22:** For notice of situation or change of situation of the registered office.
- **Form CAA-11:** For filing a statement for registration of the consolidation and division of shares.
- **Scheme of Amalgamation:** File the scheme of amalgamation as approved by NCLT with RoC.

#### 4. Compliance with Other Laws and Regulations
- **Income Tax Act:** Ensure compliance with tax implications arising from the merger, including provisions related to carry forward and set-off of losses.
- **Stamp Duty:** Pay stamp duty on the scheme of merger, if applicable.
- **SEBI Regulations:** Comply with SEBI regulations if the companies are listed entities.

#### 5. Post-Merger Activities
- **Integration Planning:** Plan and execute integration of operations, finance, HR, IT, and other functions.
- **Communication:** Communicate with stakeholders including employees, customers, suppliers, and regulatory authorities as required.
- **Accounting and Financial Reporting:** Prepare and file consolidated financial statements reflecting the merger.

#### Miscellaneous
- **Legal Compliance Certificate:** Obtain a compliance certificate from practicing company secretaries or chartered accountants.
- **Publish Notices:** Publish notices in newspapers as required by the NCLT order and Companies Act.

#### Monitoring and Review
- **Post-Merger Review:** Monitor the effectiveness of the merger and integration process. Review and address any post-merger issues that may arise.

### Important Considerations:
- **Legal Counsel:** Engage with legal advisors specializing in mergers and acquisitions (M&A) to ensure compliance with all applicable laws and regulations.
- **Financial Advisors:** Work closely with financial advisors to manage financial aspects of the merger, including valuation, accounting treatments, and tax implications.
- **Timelines:** Adhere to timelines stipulated in the NCLT order and Companies Act to avoid penalties or delays.

This checklist provides a broad overview. Specific requirements may vary based on the nature of companies involved, industry regulations, and other factors. Seeking professional advice tailored to your specific case is crucial for successful completion of the merger process after obtaining NCLT approval under IBC.