law: Companies Act, 2013 
  232.
  
    Merger
  
  and amalgamation of companies.
  1.      Where an application
  
  is made to the Tribunal under section 230 for the sanctioning of a compromise
  
  or an arrangement proposed between a company and any such persons as are
  
  mentioned in that section, and it is shown to the Tribunal—
  a.     
  
    that
  
  the compromise or arrangement has been proposed for the purposes of, or in
  
  connection with, a scheme for the reconstruction of the company or companies
  
  involving merger or the amalgamation of any two or more companies; and
  b.     
  
    that
  
  under the scheme, the whole or any part of the undertaking, property or
  
  liabilities of any company (hereinafter referred to as the transferor company)
  
  is required to be transferred to another company (hereinafter referred to as
  
  the transferee company), or is proposed to be divided among and transferred to
  
  two or more companies, the Tribunal may on such application, order a meeting of
  
  the creditors or class of creditors or the members or class of members, as the
  
  case may be, to be called, held and conducted in such manner as the Tribunal
  
  may direct and the provisions of sub-sections (3 ) to (6 ) of
  
  section 230 shall apply mutatis mutandis.
  2.      Where an order has
  
  been made by the Tribunal under sub-section (1 ), merging companies or
  
  the companies in respect of which a division is proposed, shall also be required
  
  to circulate the following for the meeting so ordered by the Tribunal, namely:—
  a.     
  
    the
  
  draft of the proposed terms of the scheme drawn up and adopted by the directors
  
  of the merging company;
  b.    
  
    confirmation
  
  that a copy of the draft scheme has been filed with the Registrar;
  c.     
  
    a
  
  report adopted by the directors of the merging companies explaining effect of
  
  compromise on each class of shareholders, key managerial personnel, promotors
  
  and non-promoter shareholders laying out in particular the share exchange
  
  ratio, specifying any special valuation difficulties;
  d.    
  
    the
  
  report of the expert with regard to valuation, if any;
  e.     
  
    a
  
  supplementary accounting statement if the last annual accounts of any of the
  
  merging company relate to a financial year ending more than six months before
  
  the first meeting of the company summoned for the purposes of approving the
  
  scheme.
  1.     
  2.     
  3.      The Tribunal, after
  
  satisfying itself that the procedure specified in sub-sections (1 ) and (2 )
  
  has been complied with, may, by order, sanction the compromise or arrangement
  
  or by a subsequent order, make provision for the following matters, namely:—
  a.     
  
    the
  
  transfer to the transferee company of the whole or any part of the undertaking,
  
  
  
  property or liabilities of the transferor company from a date to be determined
  
  by the parties unless the Tribunal, for reasons to be recorded by it in
  
  writing, decides otherwise;
  b.    
  
    the
  
  allotment or appropriation by the transferee company of any shares, debentures,
  
  policies or other like instruments in the company which, under the compromise
  
  or arrangement, are to be allotted or appropriated by that company to or for
  
  any person:
  Provided
  
  that a transferee company shall not, as a result of the compromise or
  
  arrangement, hold any shares in its own name or in the name of any trust
  
  whether on its behalf or on behalf of any of its subsidiary or associate
  
  companies and any such shares shall be cancelled or extinguished;
  a.     
  
  
  b.     
  
  
  c.     
  
    the
  
  continuation by or against the transferee company of any legal proceedings
  
  pending by or against any transferor company on the date of transfer;
  a.    
  
  
  b.    
  
  
  c.    
  
  
  d.    
  
    dissolution,
  
  without winding-up, of any transferor company;
  e.     
  
    the
  
  provision to be made for any persons who, within such time and in such manner
  
  as the Tribunal directs, dissent from the compromise or arrangement;
  f.     
  
    where
  
  share capital is held by any non-resident shareholder under the foreign direct
  
  investment norms or guidelines specified by the Central Government or in
  
  accordance with any law for the time being in force, the allotment of shares of
  
  the transferee company to such shareholder shall be in the manner specified in
  
  the order;
  g.    
  
    the
  
  transfer of the employees of the transferor company to the transferee company;
  h.     
  
    where
  
  the transferor company is a listed company and the transferee company is an
  
  unlisted company,—
  A.    
  
    the
  
  transferee company shall remain an unlisted company until it becomes a listed
  
  company;
  B.    
  
    if
  
  shareholders of the transferor company decide to opt out of the transferee
  
  company, provision shall be made for payment of the value of shares held by
  
  them and other benefits in accordance with a pre-determined price formula or
  
  after a valuation is made, and the arrangements under this provision may be
  
  made by the Tribunal:
  Provided
  
  that the amount of payment or valuation under this clause for any share shall
  
  not be less than what has been specified by the Securities and Exchange Board
  
  under any regulations framed by it;
  a.      
  
  
  b.      
  
  
  c.      
  
  
  d.      
  
  
  e.      
  
  
  f.      
  
  
  g.      
  
  
  h.      
  
  
  i.      
  
    where
  
  the transferor company is dissolved, the fee, if any, paid by the transferor
  
  company on its authorised capital shall be set-off against any fees payable by
  
  the transferee company on its authorised capital subsequent to the
  
  amalgamation; and
  j.      
  
    such
  
  incidental, consequential and supplemental matters as are deemed necessary to
  
  secure that the merger or amalgamation is fully and effectively carried out:
  Provided
  
  that no compromise or arrangement shall be sanctioned by the Tribunal unless a
  
  certificate by the company’s auditor has been filed with the Tribunal to the
  
  effect that the accounting treatment, if any, proposed in the scheme of
  
  compromise or arrangement is in conformity with the accounting standards
  
  prescribed under section 133.
  1.     
  2.     
  3.     
  4.      Where an order under
  
  this section provides for the transfer of any property or liabilities, then, by
  
  virtue of the order, that property shall be transferred to the transferee
  
  company and the liabilities shall be transferred to and become the liabilities
  
  of the transferee company and any property may, if the order so directs, be
  
  freed from any charge which shall by virtue of the compromise or arrangement,
  
  cease to have effect.
  5.      Every company in
  
  relation to which the order is made shall cause a certified copy of the order
  
  to be filed with the Registrar for registration within thirty days of the
  
  receipt of certified copy of the order.
  6.      The scheme under this
  
  section shall clearly indicate an appointed date from which it shall be
  
  effective and the scheme shall be deemed to be effective from such date and not
  
  at a date subsequent to the appointed date.
  7.      Every company in
  
  relation to which the order is made shall, until the completion of the scheme,
  
  file a statement in such form and within such time as may be prescribed with
  
  the Registrar every year duly certified by a chartered accountant or a cost
  
  accountant or a company secretary in practice indicating whether the scheme is
  
  being complied with in accordance with the orders of the Tribunal or not.
  8.      If a transferor
  
  company or a transferee company contravenes the provisions of this section, the
  
  transferor company or the transferee company, as the case may be, shall be
  
  punishable with fine which shall not be less than one lakh rupees but which may
  
  extend to twenty-five lakh rupees and every officer of such transferor or
  
  transferee company who is in default, shall be punishable with imprisonment for
  
  a term which may extend to one year or with fine which shall not be less than
  
  one lakh rupees but which may extend to three lakh rupees, or with both.
  Explanation.— For the purposes of
  
  this section,—
               
  
   i.        
  
    in
  
  a scheme involving a merger, where under the scheme the undertaking, property
  
  and liabilities of one or more companies, including the company in respect of
  
  which the compromise or arrangement is proposed, are to be transferred to
  
  another existing company, it is a merger by absorption, or where the undertaking,
  
  property and liabilities of two or more companies, including the company in
  
  respect of which the compromise or arrangement is proposed, are to be
  
  transferred to a new company, whether or not a public company, it is a merger
  
  by formation of a new company;
              
  
   ii.        
  
    references
  
  to merging companies are in relation to a merger by absorption, to the
  
  transferor and transferee companies, and, in relation to a merger by formation
  
  of a new company, to the transferor companies;
             
  
   iii.        
  
    a
  
  scheme involves a division, where under the scheme the undertaking, property
  
  and liabilities of the company in respect of which the compromise or
  
  arrangement is proposed are to be divided among and transferred to two or more
  
  companies each of which is either an existing company or a new company; and
             
  
   iv.        
  
    property
  
  includes assets, rights and interests of every description and liabilities
  
  include debts and obligations of every description.