whether resulting company in case of demerger is always a new company, plz reply as soon as possible
16 Replies
CA CS Amit Borade
(Chief Accountant)
(2828 Points)
Replied 23 September 2009
Yes... Resulting Comapny is a New Comapny.
Demerger means the transfer of one or more undertakings to any resulting company pursuant to a scheme of arrangement under Sections 391 to 394 of the Companies Act, 1956, in such a manner that —
o All the properties and liabilities of the demerged undertaking become the properties and liabilities of the resulting company.
o All the properties and liabilities are transferred at book value (excluding increase in value due to revaluation).
o The resulting company issues shares to the shareholders of demerged company on a proportionate basis.
o Shareholders holding minimum 75% of the value of shares of the demerged company (other than shares which are held by, or by a nominee for, the resulting company or its subsidiaries) become shareholders of the resulting company.
o The transfer of the undertaking is on a going concern basis.
o The demerger is in accordance with the conditions notified under Section 72A(5). No conditions have been notified till date by the Central Government.
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 23 September 2009
Resulting company is the new company
vipin kumar CA
(CA)
(194 Points)
Replied 23 September 2009
have a proof, as per v.g sir resulting company can be old company
Max Payne
(employed)
(2574 Points)
Replied 23 September 2009
After the demerger, there are 2 companies.
The resulting company is the new company,
and the demerged company is the old company.
CA Parth Shah
(Chartered Accountant)
(369 Points)
Replied 23 September 2009
no...its always in case of amalgamation where old company ceases to be in existatance and only new(amamlgamated) co. remains in existatnce.BUT IN CASE OF DEMERGER,OLD COMPANY AND NEW COMPANY BOTH REMAINS IN EXISTANCE...
Hey C.A.s.....What has happened to you...Why so many confussions!!
The Harshit Aggarwal
(B.Com(H) ,CS Final)
(5278 Points)
Replied 23 September 2009
| Originally posted by :parth | ||
| " | no...its always in case of amalgamation where old company ceases to be in existatance and only new(amamlgamated) co. remains in existatnce.BUT IN CASE OF DEMERGER,OLD COMPANY AND NEW COMPANY BOTH REMAINS IN EXISTANCE... Hey C.A.s.....What has happened to you...Why so many confussions!! |
" |
agree......
CA Amit Kanani
(Practicing CA)
(338 Points)
Replied 23 September 2009
Hey guys, Parth is right. What logic u r applying? In demerger, Generally resulting CO. is Old Co.
vipin kumar CA
(CA)
(194 Points)
Replied 24 September 2009
AS PER v.G SIR, IN CASE OF DEMERGER ,RESULTING COMPANY CAN BE A OLD COMPANY, FOR CONFIRMATION CHECHK MODULE NO. 6 PAGE NO. 146 EXAMPLE NO. 3 IN WHICH RESULTING COMPANY EXIST ON 1.4.2008 BUT DEMERGER HAPPEN ON 30.8.2008
vipin kumar CA
(CA)
(194 Points)
Replied 24 September 2009
| Originally posted by :Poonam Thanvi | ||
| " | Yes Vipin Resulting company in case of demerger is always a new company and the old companies remain no longer in existence. |
" |
POONAM OLD COMPANY(DEMERGED) ALSO EXIST AFTER THE DEMERGER
vipin kumar CA
(CA)
(194 Points)
Replied 24 September 2009
| Originally posted by :parth | ||
| " | no...its always in case of amalgamation where old company ceases to be in existatance and only new(amamlgamated) co. remains in existatnce.BUT IN CASE OF DEMERGER,OLD COMPANY AND NEW COMPANY BOTH REMAINS IN EXISTANCE... Hey C.A.s.....What has happened to you...Why so many confussions!! |
" |
MY QUESTION IS WHETHER RESULTING COMPANY CAN EXIST BEFORE DEMERGER OF DEMERGED COMPANY
Max Payne
(employed)
(2574 Points)
Replied 24 September 2009
| Originally posted by :vipin kumar | ||
| " | Originally posted by :parth " no...its always in case of amalgamation where old company ceases to be in existatance and only new(amamlgamated) co. remains in existatnce.BUT IN CASE OF DEMERGER,OLD COMPANY AND NEW COMPANY BOTH REMAINS IN EXISTANCE... Hey C.A.s.....What has happened to you...Why so many confussions!! " MY QUESTION IS WHETHER RESULTING COMPANY CAN EXIST BEFORE DEMERGER OF DEMERGED COMPANY |
" |
Dear Vipin,
I dont have the module, but i can say that it was decided in the "marshall and sons" case that the date of demerger is the date on which the court approves the scheme of demerger, and not the date on which the demerger is approved by the company.
In the light of the above, it is not possible for the resulting company to exist before the demerger.
But what is the issue in the module? Depreciation?
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