An Overview On Merger And Amalgamation
By Team Legistify / 2017-07-14
Amalgamation is the combination of one or more companies into a new entity. An amalgamation is distinct from a merger because neither of the combining companies survives as a legal entity; a completely new entity is formed to house the combined assets and liabilities of both companies.

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The term ‘merger’ is not defined under the Companies Act, 1956, and under Income Tax Act, 1961. However, the Companies Act, 2013 without strictly defining the term explains the concept. A ‘merger’ is basically a combination of two or more entities into one; the desired effect being not just the accumulation of assets and liabilities of the distinct entities, but the organization of such entity into one business.

MCA's Notification

Ministry of Corporate Affairs by the notification dated 14 December 2016 had issued rules i.e. The Companies (Compromises , Arrangements, and Amalgamations) Rules , 2016. These rules were to be effected from 15th December 2016. All the matters relating to Compromises, Arrangements, and Amalgamations (hereafter read as “CAA”) are dealt as per provisions of Companies Act, 2013 and The Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016.

Where a compromise or arrangement is proposed for the purposes of or in connection with a scheme for the reconstruction of any company or companies, or for the amalgamation of any two or more companies, the petition shall pray for appropriate orders and directions under section 230 read with section 232 of the Act.

Amalgamation also called as reconstruction occurs when a company transfers the whole of its undertaking and property to a new company consisting substantially of the same shareholders. The object of reconstruction could be to reorganize capital and variations of the right of investors. Talk to the best corporate lawyers in India to know more about amalgamations.

Amalgamation is the combination of one or more companies into a new entity. An amalgamation is distinct from a merger because neither of the combining companies survives as a legal entity; a completely new entity is formed to house the combined assets and liabilities of both companies.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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