The Ministry of Corporate Affairs (MCA) has notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2023 to expedite the process of approval of mergers or amalgamations. The amendment rules will come into effect on June 15, 2023.
When a scheme of merger or amalgamation is entered into between small companies or between a holding company and its wholly-owned subsidiary company or such other class of companies as may be prescribed, a copy of the approved scheme has to be filed before the Central Government, Registrar of Companies (RoC) and the official liquidators under Section 233(2) of the Companies Act, 2013.
As per the amendment rules, if no objections or suggestions are made by the Registrar or the official liquidators, the Central Government is required to issue a confirmation order within 60 days of the receipt of the scheme. However, if objections or suggestions are received, the Central Government has to ascertain whether the scheme is in the public interest or in the interest of the creditors and accordingly, issue a confirmation order or file an application before the National Company Law Tribunal (NCLT) for its consideration within 60 days of the receipt of the scheme.
In case the 60-day period is not complied with, it will be assumed that the government has no objection, and a confirmation order would be issued.