Secretarial practice for corporate Restructuring and mergers
Checklist for pre merger
Events
Shares of the transferor and transferee companies have to be valued by an independent valuer for fixing the exchange ratios.
Draft has to be prepared of the scheme, petition under Section 391(1), explanatory statement under Section 393, letters to the shareholders/members and notice to the stock exchanges in case of listed companies pursuant to listing agreements.
Board meetings of the transferor and transferee companies have to be held for approval of the corporate restructuring scheme, consideration of the valuation reports and fixation of exchange ratios.
Concerned stock exchanges in which the shares are listed have to be informed of the decisions taken at the aforesaid board meeting to consider the proposed scheme
Applications under Section 391(1) have to moved before the jurisdictional High Court i.e. the High Court of the State in which the registered office of the concerned company is situated, for orders for convening separate meetings of shareholders and concerned creditors of the respective companies.
Pursuant to such application the High Court can pass order fixing the date, time and venue of the meetings, appointing Chairman for the meetings and the time limit within which the Chairman of such meetings shall file his report to the Court. Such report is given in form no.35 of the Companies (Court) Rules, 1959
Notices convening the extra ordinary general meetings of the concerned companies have to be sent to the shareholders/creditors, as the case may be, in form no.36 of the said Rules along with copy of the scheme, explanatory statement and proxy form, upon getting the draft notice approved from the Registrar of the concerned High Court.
Extracts of the notice convening the meeting have to be advertised in the newspapers at least 21 days before the meeting.
Inasmuch as according to Rule 77 of the said Rules the decision of such meeting, for consideration of scheme, must be ascertained by poll only, ballot papers and ballot boxes have to be requisitioned, scrutinizers have to be appointed and arrangements have to be made for declaration, display and publication of the results at the registered office of the concerned company.
Copies of the minutes of the meeting have to be forwarded to the stock exchanges
Thereafter petitions have to be filed to the jurisdictional High Court within 7 days of filing of the report of the Chairman to the Court for sanction of the scheme of amalgamation, arrangement or reconstruction.
Notice of the hearing shall be advertised in newspapers not less than 10 days before the date of the meeting.
After the High Court approves the scheme in form no. 41, certified copy of the order of the Court has to be filed with the Registrar of Companies of the State within 14 days from the date of the order or such extended time and thereafter a copy of the order has to be annexed to the Memorandum of Association of the concerned companies.
The Official Liquidator has to be approached for appointment of practising chartered accountants and fixing their fees for inspection of the books of the transferor companies and reporting on the same to the Official Liquidator.
Upon consideration of such report of the CAs, the Official Liquidator shall file his report to the Court on the transferor companies.
Thereafter dissolution of the transferor companies without winding up would be secured.
