Status as on: 22/05/2023
MCA amended the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016, and substituted clauses 5 and 6 of Rule 25.
These Rules shall come into force with effect from the 15th day of June 2023.
Through the amendment, MCA has specified the timeline to speed up the process of Fast Track Mergers. Earlier there was no time limit for Official Liquidators and Registrar of Companies to give objections and suggestions to the Central Government (CG) and CG to pass the confirmation order of the scheme of merger and amalgamation.
Amendment:
Rule 25 (5) states that within 30 days from the receipt of a copy of the scheme under section 233(2) of the Companies Act, Official Liquidator and Registrar is required to give objections or suggestion to the CG and the CG is of the opinion that the scheme is in the public interest or in the interest of creditors, it may, within a period of 15 days after the expiry of said 30 days, issue a confirmation order of such scheme of merger or amalgamation.
If the Central Government (“CG”) does not issue the confirmation order within a period of said 60 days, it shall be deemed that it has no objection to the scheme and a confirmation order shall be issued accordingly.
Rule 25(6) If CG received objections or suggestions within 30 days of receipt of a copy of the scheme under section 233(2) of the Companies Act,
(a) CG is of the opinion that the scheme is in the public interest or in the interest of creditors, it may within a period of 30 days after the expiry of 30 days referred to above, issue a confirmation order of such scheme of merger or amalgamation.
(b) If CG is of the opinion, on the basis of such objections that the scheme is not in the public interest or in the interest of creditors, it may within 60 days of the receipt of the scheme file an application before the Tribunal stating the objections and requesting that Tribunal may consider the scheme under section 232 of the Act:
If CG does not act under (a) and (b) within a period of 60 days of the receipt of the scheme under section 233 of the Act, it shall be deemed that it has no objection to the scheme and a confirmation order shall be issued accordingly.
Disclaimer: The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at ibc@centrik.in.
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