Central Government notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2023 on 15th May 2023 by amending Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 which shall come in to force on 15th June 2023.
The government has amended rules with the powers conferred by Section 469 (1) and Section 469(2) read with section 233 of the Companies Act, 2013.
The widely recognised Fast Track Merger Process is introduced in Section 233 of the 2013 Companies Act and establishes a slightly streamlined process for mergers and amalgamations of specific groups of companies, such as small businesses, holding companies, and subsidiary companies.
As per the notification, the rules may be called the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2023 and shall come into force with effect from 15th day of June, 2023.
RULE 25(5)
As per Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2023
“Where no objection or suggestion is received within a period of thirty days of receipt of copy of scheme under sub-section (2) of section 233, from the Registrar of Companies and Official Liquidator by the Central Government and the Central Government is of the opinion that the scheme is in the public interest or in the interest of creditors, it may, within a period of fifteen days after the expiry of said thirty days, issue a confirmation order of such scheme of merger or amalgamation in Form No. CAA.12.
Provided that if the Central Government does not issue the confirmation order within a period of sixty days of the receipt of the scheme under sub-section (2) of section 233, it shall be deemed that it has no objection to the scheme and a confirmation order shall be issued accordingly.”
As per Companies (Compromises, Arrangements and Amalgamations) Rules, 2016
Where no objection or suggestion is received to the scheme from the Registrar of Companies and Official Liquidator or where the objection or suggestion of Registrar and Official Liquidator is deemed to be not sustainable and the Central Government is of the opinion that the scheme is in the public interest or in the interest of creditors, the Central Government shall issue a confirmation order of such scheme of merger or amalgamation in Form No. CAA. 12.
RULE 25(6)
As per Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2023
“Where objections or suggestions are received within a period of thirty days of receipt of copy of scheme under sub-section (2) of section 233 from the Registrar of Companies or Official Liquidator or both by the Central Government and –
(a) such objections or suggestions of Registrar of Companies or Official Liquidator, are not sustainable and the Central Government is of the opinion that the scheme is in the public interest or in the interest of creditors, it may within a period of thirty days after expiry of thirty days referred to above, issue a confirmation order of such scheme of merger or amalgamation in Form No. CAA.12.
(b) the Central Government is of the opinion, whether on the basis of such objections or otherwise, that the scheme is not in the public interest or in the interest of creditors, it may within sixty days of the receipt of the scheme file an application before the Tribunal in Form No. CAA.13 stating the objections or opinion and requesting that Tribunal may consider the scheme under section 232 of the Act:
Provided that if the Central Government does not issue a confirmation order under clause (a) or does not file any application under clause (b) within a period of sixty days of the receipt of the scheme under subsection (2) of section 233 of the Act, it shall be deemed that it has no objection to the scheme and a confirmation order shall be issued accordingly.”
As per Companies (Compromises, Arrangements and Amalgamations) Rules, 2016
“Where objections or suggestions are received from the Registrar of Companies or Official Liquidator and the Central Government is of the opinion, whether on the basis of such objections or otherwise, that the scheme is not in the public interest or in the interest of creditors, it may file an application before the Tribunal in Form No. CAA. 13 within sixty days of the receipt of the scheme stating its objections or opinion and requesting that Tribunal may consider the scheme under section 232 of the Act.”
In contrast to the original rules, the amendment has inserted a 30-day limitation period in Rule 25(5) for no objection from the Registrar of Companies. Additionally, by mentioning limitation periods as well, it has greatly improved the clarity.
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