Amalgamation of Two Companies-Steps to be taken by both :
Procedures for amalgamation of the Companies: Proceedings for an amalgamation by the transferor and transferee companies should be carried out simultaneously. These are as follows:
| In The Transferee Company | In The Transferor Company | |
| 1 | To check up whether the memorandum contains the power of amalgamation; if not, then to carry out the proceedings for its alteration and to obtain Company Law Board‟s Confirmation. | The same as in the case of transferee Company. |
| 2 | To Prepare the draft scheme including exchange ratio and get it approved by the Board’s meeting. | –do– |
| 3 | To apply to the Court for directions to convene the general meeting by way of Judge’s Summons [Rule 67 of the Companies (Court) Rules, 1959]; such directions would be in respect of matters set out in Rule 69. | –do– |
| 4 | To send notice for general meeting to every member along with a statement setting forth the terms of the compromise or arrangement and explaining its effect and particularly stating any material interests of the directors, managing director or manager, whether in their capacity as such or as members or creditor, or otherwise and the effect on those interests on the amalgamation and insofar as it is different from the effect on the like interests, of other persons [Section 393(1)(a)]. In case of the said notice being given through advertisement, to either include the aforesaid statement or to notify the place for obtaining the copies of such statement [section (1)(b)]; these can be obtained free of charge on making an application therefore in the manner indicated in the notice [section 393(3)]. | –do– |
| In case of debenture holders‟ rights being affected by amalgamation, the said statement to give like information and explanation regarding the trustees under the deed [section 393(2)]. | ||
| [Rules 69 to 76 of the Companies (Court) Rules to be noted in this connection.] | ||
| 5 | To hold the general meeting and pass the resolution approving the draft scheme of amalgamation subject to the confirmation of the high Court, resolution to be passed by a majority in number representing 3/4ths in value of the members as required by section 391 | The same as in the case of transferee company. |
| 6 | To move the High Court for approval of the scheme, and for the purpose to supply it with material facts as required by the proviso to section 391(2). | To move the High Court jointly with the transferee company, and also to supply the court with all material facts.
Further the court would need a satisfactory report from the Company Law Board or the Registrar that the affairs of the Company have not been conducted in a manner prejudicial to the interests of its members or to public interest, because it is a scheme for the amalgamation of it, with the transferee company which is being wound up. [Proviso to Section 394(1)]. |
| 7 | On receipt of the Court’s order, to file the certified copy thereof with the registrar within 30 days after the making of the order [section 394(3)]; otherwise it would not be effective. | The same as in the case of transferee company. |
| 8 | A copy of the Court’s order also to be annexed to every copy of the memorandum or instrument, which defines the constitution of the company, issued after the certified copy of the order has been filed with the Registrar. [section 391(4)] | The same as in the case of transferee company. |
| 9 | To proceed to effect the scheme of amalgamation as per the scheme approved and the directions given by the High Court by issuing suitable notices to shareholders and persons concerned and to allot shares and take over the business as per the scheme | To do the same in the case of the transferee company, except of allotment of shares and taking over business, because no question of these arises in this case. |