1st Board Meeting
The company (both transferor and transferee) should convene a board meeting and passed the following resolutions in that meeting.
- Approval of the proposal for Merger
- Appoint valuers, lawyers, solicitors & consultants
- Obtain due diligence certificate, if required.
2nd Board Meeting
Once the companies gets draft scheme of mergers, board should convene an
other board’s meeting & get approved the following resolutions.
- Approval of draft scheme of amalgamation
- Approval of exchange ratio & appointed date
- Appointment of counsel to make representation in high court
- Authorising one director/officer to sign petition/application on behalf of company
3rd Board Meeting
The board (transferee company) should take steps to call extraordinary general meeting to approve
- Allotment of shares to other than present shareholders in terms of Sec 81(1A)
- Increase in share capital or change in capital structure of authorised capital, if required
- Change in object clause or name clause if required
4th Board Meeting
Once all concerned approves proposed merger, the companies should take merger on record and also complete all the formalities, as this will be the last board meeting in the case of Transferor Company. In case of Transferor Company, the board approves accounts. In case of transferee company the board should pass resolution making allotment of shares to the shareholders of the Transferor Company as per the swap ratio after fixing the record date in the case of listed company.
Shareholders Meeting.
If the honourable high court directs to the companies (Transferor & Transferee) proposing merger to call shareholders’ meeting, then the said meeting should be called as per the direction of the court after approving all documents by the court i.e. mode of service of notice, quorum, venue & time, appointment of chairman, name of paper in which the notice of meeting was published. Here resolution should be passed to approve the merger (it may be noted that approval has to be in full and cannot be approved in part) and voting is by way of ballot and for approval 75% in value terms and 51%in number terms should vote in favour of the resolution
At the meeting, question answer session should be conducted & conduct the voting for the resolution of the approval of the scheme & get the special resolution passed.
Transferee company may conduct any other extra ordinary general meeting to approve
- Increase in share capital or change in capital structure of authorised capital.
- Special resolution authorising director for issuing shares other than existing shareholders.
Meeting of Creditors of Transferor Company.
If the honorable high court directs to the companies (Transferor & Transferee) proposing merger to call meeting of the secured & unsecured creditors, then the said meeting should be called as per the direction of the court after approving all documents by the court i.e. mode of service of notice, quorum, venue & time, appointment of chairman, name of paper in which the notice of meeting was published. Here resolution should be passed to approve the merger (it may be noted that approval has to be in full and cannot be approved in part) and voting is by way of ballot and for approval 75% in value terms and 51%in number terms should vote in favour of the resolution
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