Legal Procedure for Mergers and Acquisitions in India

A Merger is a kind of agreement based on the existing companies in pursuit of joining to form an all-new company. A merger majorly comes into the picture when the company wants to expand the arms as to broaden the circumference while making an entry to a new era in furtherance of earning market share and to polish the object of the company to impress the company’s shareholder. The legal Procedure for Mergers and Acquisitions in India is a hard- wearing task. 

Legal Procedure for Merger and Acquisition in India 

The Following is the summary of the Legal procedure for merger and acquisition in India-

1.   Sanction for Merger

Getting sanction for merger and acquisition is a feet pain job. Two or more company can only amalgamate if they have the permission o do under their memorandum of association. Furthermore, the acquiring company should also have the permission in its MoA to carry such activity of the acquired business.

2.   Notify the Stock Exchange

If the company is listed on stock exchange, then the acquiring company or acquired company both need to share the word with a Stock exchange about the merger and acquisition.

3.   Permission of the Board of  Directors

For merger and acquisition in India, the Board of Director of the company should first approve a draft proposal of the amalgamation and then give the permission to the management of the company to move a further step on the proposal.

4.   Application in the High Court

After getting the approval from the Board of Director, an application for approving the draft proposal of the amalgamation is then moves to High Court. The High Court would conduct a meeting of all shareholders and creditors to discuss and approve the amalgamation of the company. A notice of meeting will be sent to all shareholders at least 21 days in advance.

5.   Shareholder and Creditors’  Meeting

Both the company should hold a separate meeting of their shareholders and creditors for approving the amalgamation scheme. At least 75% of approval of the shareholder and creditors is required to go for merger and acquisition in the meeting.

Therefore, the legal procedure for Mergers and Acquisitions is not complete here, you still require professional consultancy before you go for it. Kindly contact us for any query.

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