Merger of 2 companies and subsquent Provident Fund treatment

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abhijit majumder (Querist)
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06 March 2024 To
The experts
Two companies say A Ltd (transferor Company) merged with B Ltd(transferee Company).
Both are registered under under employees provident fund act .

What will be the procedure under epf act to transfer all the employees of A Ltd to employees of B Ltd.
Kindly advice.
Regards
Abhijit

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 When two companies merge under the Employees' Provident Fund (EPF) Act in India, and one company (A Ltd, the transferor company) merges with another (B Ltd, the transferee company), the procedure to transfer employees' EPF accounts from A Ltd to B Ltd typically involves the following steps:

1. **Informing the EPF Authorities**: The transferee company (B Ltd) should inform the EPF authorities about the merger. This can include submitting documents such as the merger agreement, board resolutions, and other relevant documents as required by the EPF authorities.

2. **Transfer of EPF Accounts**: Once the merger is approved and legally finalized, B Ltd needs to initiate the transfer of EPF accounts of employees from A Ltd to B Ltd. This involves transferring the accumulated EPF balances, including both the employee's contribution and the employer's contribution, to the EPF accounts maintained by B Ltd.

3. **Submission of Forms**: The EPF authorities usually require specific forms to be filled out for transferring EPF accounts due to a merger. Typically, Form 13 (Transfer of EPF Account) is used for this purpose. B Ltd needs to submit Form 13 along with necessary annexures and documents to the EPF office.

4. **Verification and Processing**: The EPF office verifies the details provided and processes the transfer request. They ensure that the transfer is compliant with EPF rules and that employees' interests are protected during the transfer process.

5. **Communication to Employees**: B Ltd should inform all employees of A Ltd about the transfer of their EPF accounts to B Ltd. This communication should be clear and transparent, detailing how their EPF accounts are being transferred and any changes or implications for the employees.

**Compliance and Record-Keeping**: Ensure that all procedures are followed as per EPF regulations. Both A Ltd and B Ltd should maintain proper records of the transfer process for audit and compliance purposes.

It's advisable for B Ltd to consult with their legal and HR teams to ensure that all regulatory requirements are met and that the transition of EPF accounts is smooth and compliant with EPF laws and regulations. Additionally, seeking guidance from EPF authorities or professional consultants experienced in EPF matters can provide further clarity and assistance in navigating the process.