Fast Track Merger – A Novel Concepts
Fast Track Merger is a new insertion in the corporate laws lexicon by Section 233 of the Companies Act, 2013. The Companies Act introduced the novel concepts fast track merger for Small Companies and Holding and its wholly owned subsidiary Companies. This is the first significant change to merger and amalgamations regime in the last six decades, with the previous Companies Act having been in place since 1956. There are pragmatic reforms for Merger and Acquisitions under Companies Act, 2013, which could make merger, acquisitions and restructuring easier for companies.
There was a long felt need to simplify and fast track the procedure for mergers of holding-subsidiary or companies where interest of third parties is not involved. The act clarifies that this fast track process shall apply not just to mergers but also to all types of compromise & arrangements involving these companies.
Even the Companies have the option to follow the normal route of merger process if the desire.
Provisions of section 230 to 232 of the Act for Merger & Amalgamation is very time cumbersome activity, as it includes clearance from many regulatory bodies and all type of companies has to go through such route. Under the fast track process Central government has the power to approve such scheme and there is no need to approach to NCLT.
CAA.9- Notice of the scheme inviting objections or suggestions
CAA.10 – Declaration of solvency
CAA.11 Notice of approval of the scheme of merger
CAA.12 Confirmation order of scheme of merger or amalgamation between INC.28 Notice of Order of the Court or any other competent authority
GNL-1 Filing of Application with ROC
The new provisions should make it easier for corporations proposing mergers as it spears to have a good system of checks & balances to prevent abuse of these provisions.