MERGERS AND ACQUISITION
PROCEDURES FOR MERGERS AND ACQUISITIONS AS PER COMPANIES ACT
As per the Companies Act 1956, the Memorandum of Association must permit not only acquisition, it should also permit the company to carry on the business of the acquired company. In case the Memorandum of Association does not contain the aforementioned, the permission of the shareholders, the Board of directors as well as the Company Law Board is to be sought.
The Stock exchanges under which the respective companies are listed must be notified of the merger.
The draft amalgamation (approved by the board of directors) should be approved by the High Court.
The shareholders and creditors must, by a majority, approve the merger.
The High Court should give its permission via order, to the merger after taking into consideration the various factors. The certified copy of the order is then to be filed at the Registrar Of Companies.