Reconstruction of a company

 

can some one please clarify my following doubts:

1. A company (Name XYZ) has changed its status from a public company to a private company. and pursuant to its change of status, it has also changed its name (New name ABC). Can this be considered as reconstruction of the company? management, Board of directors, business has remained unchanged.

2. XYZ was a majority share holder of another company (name PQR). Would change in the status of the XYZ and change of its name amount to reconstruction of PQR?

please help!!

Replies (3)

The change in name and change of status from public limited to private limited does not amount to reconstruction of the Company or any of the company in which the said company is having any interest.

Thanks & Regards,

Avika Kapoor

The expression `arrangement' or `reconstruction' is generally used when referring to the involvement of the rights of a company's shareholders and/or creditors, especially in the context of variation of such rights.

 

According to Halsbury's Laws of England (4th Edition Volume VII, paragraph 1539, page 855): "Neither `reconstruction' nor `amalgamation' has a precise legal meaning. Where an undertaking is being carried by a company and is in substance transferred, not to an outsider, but to another company consisting substantially of the same shareholders with a view to its being continued by the transferee company, there is a reconstruction."

 

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Regards

There is no restructuring as the transaction does not affect rights of members and/or creditors of the company as it normally appears in case of amalgamation, merger , acquisition and internal restructuring in case of reduction in share dapital or restructuring of debt of the company in fin. difficulties. Regards, Umesh Vyas

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