Question

Explain various provisions of companies act, 1956 related to the mergers and acquisitions in India

Answer 1

Answer:

Mergers and amalgamations are regulated under the provisions of the Companies Act, 1956 whereas takeovers are regulated under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations. Coverage: Compromise & Arrangement between a company and its creditors or any class of them; or.

Explanation:

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Answer 2

The 1956 Companies Act empowers the Central Government to inspect a company's books of accounts, to perform special audits and also investigate into a company's affairs.

• The various provisions led down for mergers and acquisitions are -

1. The merger scheme is accepted to streamline the process of merger between two or more representatives of companies holding at least 90% of the shares or creditors comprising nine-tenths of the equity.
2. Chapter fifteen of the Companies Act provides for the conciliation, settlement, amalgamation and demerger schemes.
3. Demerger or separation of businesses is basically a separation of a company's undertaking, property and liabilities for sale to two or more firms.