Merger and amalgamation

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Yogita Kavishwar (Querist)
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19 May 2014 If two companies are under amalgamation come together and form a new company then whether that new Company has to follow all that compliance to form a new company? and who will be the subscribers to MOA at such time?

Yogita Kavishwar

Yogita Kavishwar (Querist)
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19 May 2014 Hello is there anyone? Please reply.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2024 When two companies are amalgamated and a new company is formed as a result, several compliance requirements need to be addressed. Here’s a detailed breakdown of the process and the compliance requirements for the newly formed company:

### 1. **Formation of a New Company**

**a. **Compliance for the New Company:**

- **Incorporation Process:** The newly formed company must follow the entire process for incorporation as per the Companies Act, 2013. This includes filing the necessary documents with the Registrar of Companies (ROC), obtaining a Certificate of Incorporation, and complying with other statutory requirements.
- **Documents and Forms:** The new company will need to file various forms and documents, including:
- **Form INC-7:** Application for Incorporation of a Company.
- **Form INC-22:** Notice of situation or change of address of the registered office.
- **Form DIR-12:** Particulars of appointment of directors and the key managerial personnel.
- **Memorandum of Association (MOA) and Articles of Association (AOA):** Drafted as per the Companies Act.

**b. **Obligations of the New Company:**

- **Compliance with Laws:** The new company must comply with all relevant laws and regulations, including the Companies Act, 2013, and any other applicable regulations.
- **Statutory Registers:** Maintain all statutory registers, including the register of members, directors, and other key records.
- **Annual Filing:** Ensure compliance with annual filing requirements, such as annual returns and financial statements.

### 2. **Subscribers to the Memorandum of Association (MOA)**

**a. **Subscribers at the Time of Formation:**

- **Who Can Be Subscribers:** Subscribers to the MOA of the new company will typically be the persons or entities that are involved in the formation of the new company. In the case of amalgamation:
- **Directors or Shareholders:** These may include the directors of the amalgamated companies or representatives of the entities involved in the amalgamation.
- **Existing Companies:** If the merging companies are involved in the formation, their representatives or designated persons will subscribe to the MOA.

**b. **Process for Subscribers:**

- **Signatures:** The MOA must be signed by at least two subscribers in the case of a private company and at least seven subscribers in the case of a public company. The subscribers will sign the MOA and AOA, agreeing to take up shares in the new company.
- **Declaration:** The subscribers will need to provide a declaration of their consent and ability to subscribe to the shares of the new company.

### 3. **Specific Compliance Related to Amalgamation**

**a. **Approval and Documentation:**

- **Scheme of Amalgamation:** The scheme of amalgamation needs to be approved by the National Company Law Tribunal (NCLT) or the relevant authority as per the Companies Act. This includes the drafting and approval of the scheme, filing with the ROC, and obtaining the necessary approvals.
- **Asset and Liability Transfer:** All assets and liabilities of the amalgamating companies are transferred to the new company as per the terms of the scheme of amalgamation.

**b. **Compliance Post-Merger:**

- **Transfer of Assets:** Ensure proper documentation and compliance for the transfer of assets, liabilities, and contracts from the amalgamating companies to the new company.
- **Registration and Licensing:** Update all relevant registrations and licenses to reflect the new company’s name and details.

### Summary

1. **Formation of a New Company:** The new company must follow the standard incorporation process, including filing necessary documents and obtaining regulatory approvals.

2. **Subscribers to MOA:** The subscribers to the MOA will typically be the individuals or representatives of the amalgamating companies, who sign the MOA and AOA to form the new company.

3. **Post-Amalgamation Compliance:** Ensure compliance with all regulatory requirements for asset and liability transfer, update registrations and licenses, and adhere to statutory obligations for the new company.

It is advisable to work closely with legal and financial advisors to ensure all compliance requirements are met and to facilitate a smooth transition during the amalgamation process.

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