Procedure for Mergers and Acquisitions services in India

What do you understand by mergers?

• When two or more entities combined together to form a new entity is known as a merger. The merger is clearly mentioned under the Companies Act, 2013.

• There are two kinds of parties involved in the merging, one is the merger and the other is merged.

• The merger is the one, that handover its assets to other entity; while merged is the one, who accepts the assets of the merger.

• In Mergers and Acquisitions process the companies, take approval of the board of the directors and shareholders. Without their approval, entities cannot undergo Mergers and Acquisitions.

What is the procedure of mergers?

• The first step is to hold board meetings to discuss the following details-

Scheme approval

Date, place and time of meeting for creditors and shareholders

• Once they come up with the resolution, it has to be published to check if there are any objections regarding the merger or not.

• A document of solvency must be filed with the ROC of their states before summoning up the members and creditors for the meeting.

• Before holding a meeting, members of the company must be notified at least 21 days in prior and further details regarding details of compromise and arrangement, declaration of insolvency, and a copy of scheme.

• Creditors of the company must also be informed at least 21 days, before the meeting. And 9th/10th of the creditors must approve the scheme of the merger for the execution.

• The final conclusion of the meeting must be filed within 7 days with the regional director, registrar of the companies and official liquidator.

• At last, the confirmation must be filed with ROC if transferor and transferee agree to the scheme and there is no objection filed against it.

Mergers and Acquisitions

What do you understand by acquisition?

In acquisition, two companies are involved; one is called the acquiree while the other is called an acquirer. Acquiree company is the merged and acquirer company still exists either with the same name or with a different one.

The acquisition involves the buying of a company by other company. To gain control ownership, the acquiring company must have at least 50 % of the shares of the acquired company and at the same time; give consideration to shareholders.

What is the procedure of Acquisition?

• You must do a detailed inspection of the company, which you are going to acquire to do away with future challenges. One should have a proper record of Revenues of the acquired company.

• Once you are done with the research, the acquiring company can contact the target company to clarify the issues, if any.

• After this, a non-disclosure agreement must be signed by the target company, stating that they will disclose any of the insider information to anyone outside the company.

• When the non-disclosure agreement is signed, the target company will hand over all the documents and other details to the Acquiring Company.

• The non-disclosure agreement will be followed by the submission of a list of documents by the target company to the Acquiring Company.

• The submission of documents may take some time, as the target company has to consolidate all the basic details required. Then the acquiring company will negotiate the prices with the target company if required. The author is an expert on the Mergers and Acquisitions, click here for more interesting information

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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Mergers and Acquisitions |M&A | Defination | M&A advisory services

M & A (Merger & Acquisition) nowadays has taken a strong uplift and is trending in the market in much expedite manner, with this even M& A advisory has become a strong profitable business line. It requires deep, correct, precise and most importantly updated knowledge and experience in acquisitions, buybacks, cross-border transactions and such procedural steps to execute the same. Company sale , mergers, takeovers, exit strategy development, assessment of strategic options, MCA updates, SEBI compliances,  proper due diligence, banks involvement and various compliances and intimation in that regard to concerned authorities forms the part of the Mergers and Acquisitions in India, which requires expert knowledge and high level of expertise accompanied with experience .

Hence it is advisable to hire an M&A advisory in this regard. We are deeply engaged in providing the end to end solution in this regard. We are engaged in advising the clients on the joint venture, takeover defenses, buyouts, takeover (hostile or friendly).  We formulate a bridge between acquiring Company and the target company and do every kind of checks and inspections to minimize the risk exposure to the acquiring company.

We facilitate the best to put up the true picture of the target company and analyze the potential growth opportunity in the deal to be finalized. Before we initiate anything a formal agreement is executed between us (M&A advisory and the client). We provide all legal documentation requirements and does requisite liaison work on behalf of the client. Meetings with the Board of the director, taking shareholder approval, formulating the Director's disclosure report, regulatory filings and the final closing forms the important stages of our services (M& A advisory)

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