Acquistion of private limited company

Dear Vikas,

There is no specific guidelines for acquisition of a pvt co by a pvt co. Since the private company is governed by its Articles, kindly check first whether the Articles of acquirer provides such clause.

The terms of acquisition shall be mutually decided by both the parties and the following formalities has to be completed:

1. Board Resolution to approve the acquisition by both the companies. Generally companies enter into a Share Purchase Agreement or Investment Agreement. That shall also be approved in the Board Meeting.

2. Induction of directors of acquiror on the board of other company

3. Transfer of shares held by existing members/directors to the acquiror

4. If the acquiror wish to change the name, complete the formalities of Section 21

5. If the regsitered office of the acquiror is located into a different state, ROC or city- shifting of registered office shall take place as per section 17/17A or 146 and ROC forms shall be filed accordingly.

6. Generally companies prefer to change the Statutory Auditors, if so, the same shall be done in the ensuing General Meeting.

7. Accounting entries shall be made in the accounts.

Other formalities shall be complied according to the situation.