How to go about Merger and Amalgamation SECTION 390,391,392,394
390 includes all definitions terms and general meaning of the termelogy used in other sections of Merger and Amalgation.
391 enlightens on compromise and arrangement with members , creditors and their class. It is about first application to high court by company , its members , creditors in a going concern. Whereas, Liquidator , contributory if the company is in winding up process.
HC gives direction to conduct meeting of members, creditors or class of them.
HC appoints the chairman and decides the quorum for the meeting. Hc has super power through out the process of C/A.
Company has to obtain an approval from the majority of members, present and voting personally or thru proxy if allowed, holding 3/4 in value. HC may sanction the scheme if satisfied, after the petition or second application made by company.
File the oder of HC to Roc in eform 21 (now INC 28). Also attach the same with every MOA or other instrument incase, issued after filing with RoC . If company fails in attaching it, company and each officer in default will be liable for a penalty of rs 100 for each copy of moa issued.
HC may put a stay on any suit or commencement
Of any proceeding against the company for speedy completion of compromise and arrangement in economic interest.
Order of high court may be appealed in SC or higher bench of HC. ORDER of SC has to be filled with roc, attached with moa, SC may put a stay on suit n proceeding till the application is disposed off.
Explanation given above is in short, there is lot to it. Refer Corporate restructing, valuation and insolvency and other books by Csanoop Jain.
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