Demerger means the transfer of one or more undertakings to any resulting company pursuant to a scheme of arrangement under Sections 391 to 394 of the Companies Act, 1956, in such a manner that —
oAll the properties and liabilities of the demerged undertaking become the properties and liabilities of the resulting company.
oAll the properties and liabilities are transferred at book value (excluding increase in value due to revaluation).
oThe resulting company issues shares to the shareholders of demerged company on a proportionate basis.
oShareholders holding minimum 75% of the value of shares of the demerged company (other than shares which are held by, or by a nominee for, the resulting company or its subsidiaries) become shareholders of the resulting company.
oThe transfer of the undertaking is on a going concern basis.
oThe demerger is in accordance with the conditions notified under Section 72A(5). No conditions have been notified till date by the Central Government.
no...its always in case of amalgamation where old company ceases to be in existatance and only new(amamlgamated) co. remains in existatnce.BUT IN CASE OF DEMERGER,OLD COMPANY AND NEW COMPANY BOTH REMAINS IN EXISTANCE...
Hey C.A.s.....What has happened to you...Why so many confussions!!
no...its always in case of amalgamation where old company ceases to be in existatance and only new(amamlgamated) co. remains in existatnce.BUT IN CASE OF DEMERGER,OLD COMPANY AND NEW COMPANY BOTH REMAINS IN EXISTANCE...
Hey C.A.s.....What has happened to you...Why so many confussions!!
AS PER v.G SIR, IN CASE OF DEMERGER ,RESULTING COMPANY CAN BE A OLD COMPANY, FOR CONFIRMATION CHECHK MODULE NO. 6 PAGE NO. 146 EXAMPLE NO. 3 IN WHICH RESULTING COMPANY EXIST ON 1.4.2008 BUT DEMERGER HAPPEN ON 30.8.2008
no...its always in case of amalgamation where old company ceases to be in existatance and only new(amamlgamated) co. remains in existatnce.BUT IN CASE OF DEMERGER,OLD COMPANY AND NEW COMPANY BOTH REMAINS IN EXISTANCE...
Hey C.A.s.....What has happened to you...Why so many confussions!!
"
MY QUESTION IS WHETHER RESULTING COMPANY CAN EXIST BEFORE DEMERGER OF DEMERGED COMPANY
"
no...its always in case of amalgamation where old company ceases to be in existatance and only new(amamlgamated) co. remains in existatnce.BUT IN CASE OF DEMERGER,OLD COMPANY AND NEW COMPANY BOTH REMAINS IN EXISTANCE...
Hey C.A.s.....What has happened to you...Why so many confussions!!
"
MY QUESTION IS WHETHER RESULTING COMPANY CAN EXIST BEFORE DEMERGER OF DEMERGED COMPANY
"
Dear Vipin,
I dont have the module, but i can say that it was decided in the "marshall and sons" case that the date of demerger is the date on which the court approves the scheme of demerger, and not the date on which the demerger is approved by the company.
In the light of the above, it is not possible for the resulting company to exist before the demerger.
But what is the issue in the module? Depreciation?