Governing Provisions and Sections of Companies Act 2013

By By CS Sneha Khaitan & CS Urvi Sanghvi M R & Associates A Firm of Practising Company secretaries 46 B B Ganguly Street, 406 Kolkata 700012 Email : mrasso1996@gmail.com +91 9903069745 ; 033 22379517

Governing Provisions Sec. 230 to 240 of the Companies Act 2013 & The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 & NCLT Rules 2016 (Other than Fast track mergers)

Sections........ Sec. 230 Power to compromise or make arrangements with creditors /members Sec. 231 Power of Tribunal to enforce Compromise /Arrangements Sec. 232 Merger /amalgation of Cos. Sec. 233 Merger / Amalgamation of small/ Holding/ WOS Sec. 234 Merger / Amalgamation with Foreign Cos. By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

FAST TRACK MERGERS Small Cos. / Start Ups /Holding & WOS Sec. 233 & Rule 25

CG Power delegated to RD MCA Notification dated 19.12.2016 . CG hereby delegates to the Regional Director at Mumbai, Kolkata, Chennai, New Delhi, Ahmedabad, Hyderabad and Shillong, the powers and functions vested in it under the following sections of the said Act.. 233 (2), (3), (4), (5) and (6) small co. merger By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Applicability of Sec. 233 2 or more small companies OR Between a holding Co. & its wholly- ownedsubsidiary Co. OR 2 or more start-up Cos. (01.02.21) OR start-up Co. with small Co. (01.02.21) By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Small Company Other than apublic company (MEANS PVT CO.) PUSC --- 4 Crores AND T/O --- 40 Crores (15.09.2022) PUSC --- 2 Crores AND T/O --- 20 Crores (01.04.2021) Exceptions: Holding & Subsidiary Co. Sec. 8 Co. Co.orbody corporategoverned by any special Act By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Start up Company start-up company means a private company incorporated Companies Act, 2013 or Companies Act, 1956 and recognised as such in accordance with notification number G.S.R. 127 (E), dated the 19th February, 2019 issued by the Department for Promotion of Industry and Internal Trade under the By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Which cos. Are considered start ups? Upto a period of 10 years from the date of incorporation/ registration, if incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm or a LLP in India. Turnover for any of the financial years since incorporation/ registration has not exceeded Rs.100 Crs. Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation. Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a Startup . By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Which cos. Are not considered start ups? An entity shall cease to be a Startup on completion of 10 years from the date of its incorporation OR turnover for any previous year exceeds Rs.100 crs. By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Steps Proper Due Diligence Appointed Date & Financial Statement Date Valuation analysis & drafting scheme Approval of Board of Directors Notice in CAA 9 to ROC & OL & applicable regulatory auth. Declaration of Solvency in CAA 10 Meeting of Shareholders & Creditors Notice of approval of scheme in CAA 11 Approval / Objections to Scheme Post merger Compliances STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8 STEP 9 STEP 10 By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

STEP 1 Proper Due Dilligence few points MGT-14---- For Accts & BR approval filed-Pvt/PLC (2014/15) CFS--- if applicable or not filed or not--????? Director Report- Error in drafting u/s 134 disclosure Scheduled disclosed as per Schedule-III--- Investment Scheduled MOA-object business in P / L revenue as per same 45-1A violations** By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

45 1A when a company's financial assets constitute more than 50 per cent of the total assets and income from financial assets constitute more than 50 per cent of the gross income. By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Proper Due Dilligence few points MGT 4 / 5 / 6 shall be filed in case of Holding & WOS Company (Creation of beneficial interest) Merger clause in MOA shall exists in all cos. Business of transferor co. shall exists in MOA of Transferee co. Upto-date filing of Balance sheet BEN 2, DPT 3, INC 22A wherever applicable shall be filed No enquiry, investigation, prosecution pending By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

STEP 2 Appointed DATE 1st April OR ??? Where the appointeddate is a specified calendar date, it may precede the date of filing of application of merger/amalgamation if the appointeddate is dated beyond a year from the date of filing, justification for the same will be required to be stated in the scheme and the same cannot be opposed to public interest. By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Date of Financial Statement Audited / Unaudited As on 31.03.2022--????? Provisional statement (required for CAA 10- not older than 60 days ?? By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

STEP 3 Valuation Analysis By Registered Valuer -247 w.e.f. 01.02.2019 DCF / NAV / FMV By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

STEP 4 APPROVAL OF BOARD Approval of Scheme Valuation report & determination of ratio Declaration of Solvency Statement of Assets & Liabilities / Financials audited / unaudited Finalization of shareholders & Creditors list By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Certificates by Stat. Auditor Verifying List of Shareholders Creditors Sec+ Unsec+allllllllll Debenture Accounting Treatment -133 By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

STEP 5 Notice of proposed scheme Sec. 233(1)(a) Notice inviting objections / suggestions in Form CAA.9 To be given to ROC & OL or persons whose interest is likely to be affected by the scheme (i.e., IT Dept., RBI, SEBI, CCI, if necessary, or other sectoral regulators or authorities) Time --- objection / suggestion shall be received within 30 days Issued By All Transferor Cos. & Transferee Co. By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Form CAA-9-Notice to OL/ROC CAA 9 FORMAT FORM NO. CAA.9 [Pursuant to section 233(1)(a) and rule 25(1)] Notice of the scheme inviting objections or suggestions Notice is hereby given by M/s ] (transferor / transferee company) that a scheme of merger or amalgamation is proposed to be entered with M/s [ ] (transferor / transferee company) and in pursuance of sub-section (1)(a) of Section 233 of the Companies Act, 2013, objections or suggestions are invited in respect of the scheme. A copy of the scheme of merger or amalgamation is enclosed. Objections or suggestions are invited from By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 9 FORMAT Form CAA-9-Notice to OL/ROC (i) the Registrar (mention the details of the Registrar of the area where the registered office of the transferor / transferee company is situated); (ii) Official Liquidator (mention the details of the Official Liquidator of the area where the registered office of the transferor company is situated); and By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 9 FORMAT Form CAA-9-Notice to OL/ROC (iii) [Any person whose interest is likely to be affected by the scheme]. proposed Any person mentioned in (i) , (ii) or (iii) above, desirous of providing objections or suggestions in respect of the scheme should send their objections or suggestions within thirty days from the date of this notice to [ ](the Central Government at . (address) and to Shri _______ (address) being authorised representative of the transferor/ transferee company). Date : Place : Sd/- (mention the details of the authorised representative of the transferor / transferee company). Enclosure: A copy of the scheme of merger or amalgamation By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

ROC Filing Form GNL-1 simultaneously with filing hard copy Who to file All Transferor & Transferee Co. Attachments Notice in CAA-9 Draft Scheme Board resolution By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

After filing CAA 9 Wait for objections / Suggestions form ROC / OL etc. (30 days) By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

STEP 6 Filing of Declaration of Solvency In Form CAA 10 along with statement of asset / liabilities, Audit Report & BR By all Transferor & Transferee Cos. After 30 days of CAA 9 & Before convening meeting of members & Creditors By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency [Pursuant to section 233(1)(c) and rule 25(2)] Declaration of solvency 1. (a) CIN of company : (b) GLN of company: 2. (a) Name of the company: (b) Address of the registered office of the company: (c) E-mail ID of the company: 3.(a) Whether the company is listed: Yes No By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency (b) If listed, please specify the name(s) of the stock exchange(s) where listed: ------------------------------------------------- 4. Date of Board of Directors resolution approving the scheme Declaration of solvency We, the directors of M/s . do solemnly affirm and declare that we have made a full enquiry into the affairs of the company and have formed the opinion that the company is capable of meeting its liabilities as and when they fall due and that the company will not be rendered insolvent within a period of one year from the date of making this declaration By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency We append an audited statement of company s assets and liabilities as at being the latest date of making this declaration. We further declare that the company s audited annual accounts including the Balance Sheet have been filed upto date with the Registrar of Companies . Signed for and behalf of the board of directors (Signature) (Name & DIN) 2 Directors By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency Verification We solemnly declare that we have made a full enquiry into the affairs of the company including the assets and liabilities of this company and that having done so and having noted that the scheme of merger or amalgamation between and ..is proposed to be placed before the shareholders and creditors of the company for approval as per the provisions of sub-section of (1) of section 233 of the Companies Act, 2013, we make this solemn declaration believing the same to be true. By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency Verified this day the day of ., 20 (1) Signature : Date Name : Place Managing Director, if any (2) Signature : Name : Director (3) Signature : . Name : . Director By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency Solemnly affirmed and declared at the day of , 20. before me. Commissioner of Oaths and Notary Public Attachments: a) Copy of board resolution b) Statement of assets and liabilities c)Auditor s report on the statement of assets and liabilities By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency ANNEXURE Statement of assets and liabilities as at . Name of the company Assets Book Estimated Value Realisable value 1. Balance at Bank 2. Cash in hand 3. Marketable securities 4. Bills receivables By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency Assets Book Estimated Value Realisable value 5. Trade debtors 6. Loans & advances 7. Unpaid calls 8. Stock-in-trade 9. Work in progress 10. Freehold property 11. Leasehold property 12. Plant and machinery 13. Furniture, fittings, utensils, etc. By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency Assets Book Value Estimated Realisable value 14. Patents, trademarks, etc. 15. Investments other than marketable securities 16. Other property By CS Sneha Khaitan Jalan & CS Urvi Sanghvi Total:

CAA 10 FORMAT CAA.10 Declaration of Solvency Assets Book Value Estimated Realisable value Liabilities Estimated to rank for payment (to the nearest rupee) 1. Secured on specific assets 2. Secured by floating charge(s) 3.Estimated cost of liquidation and other expense including interest accruing until payment of debts in full. 4.Unsecured creditors (amounts estimated to rank for payment) By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency Liabilities Estimated to rank for payment (to the nearest rupee) (a) Trade accounts (b) Bills payable (c) Accrued expense (d) Other liabilities (e) Contingent liabilities .. Total: By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 10 FORMAT CAA.10 Declaration of Solvency Total estimated value of assets Total liabilities Rs. Estimated surplus after paying in debts in full Rs. Remarks (1) Signature : Name : .. Managing Director (2) Signature : Name : Director Date: By CS Sneha Khaitan Jalan & CS Urvi Sanghvi Rs.

ROC Filing Form GNL-2 simultaneously with filing hard copy Who to file All Transferor & Transferee Co. Attachments DOS in CAA 10 Statement of Asset & Liability & Audit Report Board resolution By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

STEP 7 Meeting of shareholders & Creditors 21 days notice before meeting along with scheme To consider objection / suggestion received from ROC & OL Approval of scheme by shareholders and Creditors Approval by 9/10thvalue of Creditors Approval by 90% of the total number of shares held by shareholder By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Whether creditors meeting required or not ? Sec. 233(1)(d) OR OTHERWISE APPROVED IN WRITING ??????? By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Notice of Meeting -1 Date, Time and Venue of the Meeting Name & CIN of Cos. PAN of Cos. Date of incorporation & Type of Co. Registered office & email id Summary of main object as per MOA and main business of co. Details of change of name / regd. off/ object clause in last 5 yrs By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Notice of Meeting -2 Details of capital structure of co. Name of promoters & directors Relationship b/w cos. Approval at Board meeting (Favour / Against) Appointed date / effective date/ ratio Valuation report summary Rationale of scheme Amount due to creditors By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

Notice of Meeting-3 Effect of scheme on KMP / Director/ Promoter/Non promoter/ depositor/ creditor/ deb holders etc. & materials interests Investigations pending if any Inspection of documents Other relevant details By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

STEP 8 Notice of approval of scheme in CAA 11 Time Limit To be filed within 7 days after conclusion of meeting By Transferee Co. ONLY E forms required File to ROC (in GNL 1), File to RD (in RD 1) File hard copy to RD, ROC and OL (by hand delivery/registered/speed post) By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 11 shall be accompanied with.(1) Approved Scheme CAA 9 with GNL 1 Objections / suggestion received from ROC / OL Declaration of solvency in Form CAA.10 with GNL 2 Board Resolution By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 11 shall be accompanied with.(2) Notice of meeting of shareholder & Creditor Consent of Creditor in writing, if any Minutes of meeting of shareholder & Creditor Auditor certificate (discussed earlier) Valuation report MOA & AOA of all Cos. Financial Statement (Latest audited) Unaudited Financial Statement, if any By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 11 shall be accompanied with.(3) Form GNL 1 and RD 1 List of shareholders and Creditors Proof of dispatch of notice to shareholders and creditors Attendance sheet for GM By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

FORM NO.CAA.11 [Pursuant to section 233(2) and rule 25(4)] CAA 11 FORMAT Notice of approval of the scheme of merger (To be filed by the transferee company to the Central Government, Registrar and the Official Liquidator) 1. (a) Corporate Identity Number (CIN) : (b) Global Location Number GLN) : 2. (a) Name of the transferee company: (b) Registered office address: (c) E-mail id: By CS Sneha Khaitan Jalan & CS Urvi Sanghvi

CAA 11 FORMAT CAA-11 3. Whether the transferor and transferee are: Small companies Holding and wholly owned subsidiaries 4. Details of transferor (a) Corporate Identity Number (CIN) : (b) Global Location Number GLN) : Name of the company: Registered office address: E-mail id: 5. Brief particulars of compromise or arrangement involving merger: By CS Sneha Khaitan Jalan & CS Urvi Sanghvi