Compliances to be undertaken for sale of an Undertaking

Devershi Gupta | Last updated: 03 December 2021

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The sale, lease, or disposal of a company's undertaking requires specific compliances under Section 180(1)(a) of the Companies Act, 2013. This includes obtaining prior consent from the company's members via a special resolution. For sales, a postal ballot is mandatory to ensure broader member participation. The definition of 'undertaking' involves both a qualitative understanding from court precedents and a quantitative test based on net worth or income generation. The Audit Committee may also need to value the undertaking.

The Companies Act imposes some restrictions on the general powers of directors. Pursuant to section 180 of Companies Act, 2013 (Act, 2013), there are certain powers which the board of directors of a company can exercise only with the consent of the members of the company by means of a special resolution. In this article, sub-clause (a) of sub-section (1) of section 180 of the Act, 2013 has been discussed at length to ascertain the meaning of undertaking and compliances to ensure at the time of s

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1 Year PLAN

1999

(Excl. of GST ₹359)

BEST VALUE

2 Years PLAN

3499

(Excl. of GST ₹629)

3 Months PLAN

999

(Excl. of GST ₹179)

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About the Author

Devershi Gupta

PCS, LLB

I am a Company Secretary with a demonstrated history of working in the legal services industry. Skilled in Secretarial Audit, IPO management, Mergers Acquisitions (MA), and Private Equity. Strong legal professional with a B.A.LL.B. focused in Corporate Law from CCS (Chaudhary Charan Singh) University.

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