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Date: 09-Sep-2024 Category: Extra Ordinary State: Union Government Country: India

Companies Compromises Arrangements and Amalgamations Amendment Rules 2024

Issued by Ministry of Corporate Affairs · Not Applicable

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Executive Summary & Key Takeaways

Description of the Gazette Notification

  • This gazette notification announces an amendment to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, through the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024.
  • The amendment specifically addresses mergers and amalgamations involving a foreign holding company (transferor) and its wholly-owned Indian subsidiary (transferee).

Key Changes

  • Addition of a new sub-rule (5) to Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
  • This new sub-rule mandates that in mergers or amalgamations where a foreign holding company incorporated outside India merges with its wholly-owned Indian subsidiary, both companies must obtain prior approval from the Reserve Bank of India (RBI).
  • The transferee Indian company must comply with Section 233 of the Companies Act, 2013.
  • The transferee Indian company must apply to the Central Government under Section 233 of the Companies Act, 2013, and the provisions of Rule 25 will apply to this application.
  • The declaration mentioned in sub-rule (4) must be made during the application stage under Section 233 of the Companies Act, 2013.
  • The amendment comes into effect on September 17, 2024.

Impact Analysis

Impact on Foreign Companies

  • Potential delays in merger and amalgamation processes due to the additional approval step.

Impact on Indian Subsidiaries

  • Potential delays in merger and amalgamation processes.

Impact on the RBI

  • Potential need for additional resources to handle the increased workload.

Impact on the Central Government

  • Potential need for additional resources to handle the increased workload.

Suggested Action Items

  • Stakeholders should engage with regulatory bodies to ensure smooth implementation of the amendment.

Key Entities Referenced

Companies Act, 2013 (18 of 2013): The primary legislation governing companies in India. Sections 233 and 234, along with Section 469, provide the legal basis for this amendment. Companies (Compromises, Arrangements and Amalgamations) Rules, 2016: The rules amended by this notification. Rule 25A is specifically modified. Reserve Bank of India (RBI): The central bank of India, now requiring prior approval for mergers and amalgamations involving foreign holding companies and their Indian subsidiaries. Central Government: The entity empowered to make these amendments and to receive applications under Section 233 of the Companies Act, 2013. Gazette of India: The official publication where this notification and previous amendments were published.
Official Source Record View Original Source →
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 xxxGIDHxxx सी.जी.-डी.एxलx.x-GअID.-E1x0x0x 92024-257026 CG-DL-E-10092024-257026 असाधारण EXTRAORDINARY भाग II—खण्ड 3—उप-खण्ड (i) PART II—Section 3—Sub-section (i) प्राजधकार से प्रकाजित PUBLISHED BY AUTHORITY सं. 513] नई दिल्ली, सोमवार, जसतम्ब र 9, 2024/भार 18, 1946 No. 513] NEW DELHI, MONDAY, SEPTEMBER 9, 2024/BHADRA 18, 1946 कारपोरेट कार् यमंत्रालर् अधिसचू ना नई दिल् ली, 9 जसतम् बर, 2024 सा.का.जन. 555 (अ).— केन्द्रीर् सरकार, कंपनी अजधजनर्म, 2013 (2013 का 18) की धारा 233 और 234 के साथ पठित धारा 469 की उपधारा (1) और (2) द्वारा प्रित्त िजिर्ों का प्रर्ोग करते हुए, कंपनी (समझौते, िहराव और समामेलन) जनर्म, 2016 का और संिोधन करने के जलए जनम्नजलजखत जनर्म बनाती है, अथायत्:- 1.(1) इन जनर्मों का संजिप्त नाम कंपनी (समझौते, िहराव और समामेलन) संिोधन जनर्म, 2024 है। (2) र्े जनर्म तारीख 17 जसतंबर, 2024 से प्रवृत्त होंगे। 2. कंपनी (समझौते, िहराव और समामेलन) जनर्म, 2016 के, जनर्म 25क के, उप-जनर्म (4) के पश्चात्, जनम्नजलजखत उप-जनर्म अन्द्तःस्ट्थाजपत दकर्ा िाएगा, अथायत्: "(5) िहां भारत के बाहर जनगजमत अंतरणकताय जविेिी कंपनी होलल्डंग कंपनी ह ैऔर अंतठरती भारतीर् कंपनी भारत में जनगजमत पूणय स्ट्वाजमत्व वाली सहार्क कंपनी ह,ै जवलर् र्ा समामेलन करती ह,ै- (i) िोनों कंपजनर्ों को भारतीर् ठरज़वय बैंक का पूवय अनुमोिन प्राप्त करना होगा; (ii) अंतठरती भारतीर् कंपनी धारा 233 के उपबंधों का अनुपालन करेगी; (iii) अंतठरती भारतीर् कंपनी द्वारा अजधजनर्म की धारा 233 के अधीन केंरीर् सरकार को आवेिन दकर्ा िाएगा और जनर्म 25 के उपबंध ऐसे आवेिन पर लागू होंगे; और 5786 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] (iv) उपजनर्म (4) म ेंजनर्ियष्ट घोषणा, अजधजनर्म की धारा 233 के अधीन आवेिन करने के चरण म ेंकी िाएगी।”। [फा. सं. 2/31/सीएए/2013-सीएल.V पाटय] मनोि पाण्डेर्, अपर सजचव ठटप्पण: मूल जनर्म भारत के रािपत्र, असाधारण, भाग 2, खंड 3, उप-खंड (i) में अजधसूचना संख्र्ा सा.का.जन. 1134(अ), तारीख 14 दिसंबर, 2016 के द्वारा प्रकाजित दकए गए थ ेऔर तत्पश्चात् जनम्नजलजखत अजधसूचनाओं द्वारा संिोजधत दकए गएः- क्रम संख्र्ा अजधसूचना संख्र्ा अजधसूचना की तारीख 1. सा.का.जन 368(अ) 13 अप्रैल, 2017 2. सा.का.जन 79(अ) 3 फरवरी, 2020 3. सा.का.जन 773(अ) 17 दिसंबर, 2020 4. सा.का.जन 93(अ) 1 फरवरी, 2021 5. सा.का.जन 401(अ) 30 मई, 2022 6. सा.का.जन 367(अ) 15 मई, 2023 MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 9th September, 2024 G.S.R. 555 (E).— In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with sections 233 and 234 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, namely :- 1.(1) These rules may be called the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024. (2) They shall come into force from the 17th day of September, 2024. 2. In the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, in rule 25A, after sub-rule (4), the following sub-rule shall be inserted, namely: - “(5) Where the transferor foreign company incorporated outside India being a holding company and the transferee Indian company being a wholly owned subsidiary company incorporated in India, enter into merger or amalgamation, – (i) both the companies shall obtain the prior approval of the Reserve Bank of India; (ii) the transferee Indian company shall comply with the provisions of section 233; (iii) the application shall be made by the transferee Indian company to the Central Government under section 233 of the Act and provisions of rule 25 shall apply to such application; and (iv) the declaration referred to in sub-rule (4) shall be made at the stage of making application under section 233 of the Act.". [F. No. 2/31/CAA/2013 – CL.V Part] MANOJ PANDEY, Addl. Secy. Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification number G.S.R 1134(E) dated the 14th December, 2016 and subsequently amended vide the following notifications: -[भाग II—खण् ड 3(i)] भारत का रािपत्र : असाधारण 3 Serial Number Notification Number Notification Date 1. G.S.R 368(E) 13th April, 2017 2. G.S.R. 79(E) 3rd February, 2020 3. G.S.R. 773(E) 17th December, 2020 4. G.S.R. 93(E) 1st February, 2021 5. G.S.R. 401(E) 30th May, 2022 6. G.S.R.367(E) 15th May, 2023. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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