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TMI BlogCompanies (Compromises, Arrangements and Amalgamations) Rules, 2016X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolvency and Bankruptcy Code, 2016 (31 of 2016); (2) All other words and expressions used in these rules but not defined herein, and defined in the Act or in the Companies (Specification of Definitions Details) Rules, 2014 or in the National Company Law Tribunal Rules, 2016, shall have the same meanings respectively assigned to them in the Act or in the said rules. 3. Application for order of a meeting. - (1) An application under sub-section (1) of section 230 of the Act may be submitted in Form no. NCLT-1 (appended in the National Company Law Tribunal Rules, 2016) along with:- (i) a notice or admission in Form No. NCLT-2 (appended in the National Company Law Tribunal Rules, 2016); (ii) an affidavit in Form No. NCLT-6 (appended in the National Company Law Tribunal Rules, 2016); (iii) a copy of scheme of compromise or arrangement, which should include disclosures as per sub-section (2) of section 230 of the Act; and (iv) fee as prescribed in the Schedule of Fees. (2) Where more than one company is involved in a scheme in relation to which an application under sub-rule (1) is being filed, such application may, at the discretion of such companies, be filed as a joint-applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors or the members, or the creditors or members of any class, as the case may be, whose meetings have to be held; (f) notice to be given of the meeting Or meetings and the advertisement of such notice; (g) notice to be given to sectoral regulators or authorities as required under sub-section (5) of section 230; (h) the time within which the chairperson of the meeting is required to report the result of the meeting to the Tribunal; and (i) such other matters as the Tribunal may deem necessary. 6. Notice of meeting. - (1) Where a meeting of any class or classes of creditors or members has been directed to be convened, the notice of the meeting pursuant to the order of the Tribunal to be given in the manner provided in sub-section (3) of section 230 of the Act shall be in Form No. CAA.2 and shall be sent individually to each of the creditors or members. (2) The notice shall be sent by the Chairperson appointed for the meeting, or, if the Tribunal so directs, by the company (or its liquidator), or any other person as the Tribunal may direct, by registered post or speed post or by courier or by e-mail or by hand delivery or any Other mode as directed by the Tribunal to thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare exchange ratio (if applicable) and other considerations, if any ; (c) summary of valuation report (if applicable) including basis of valuation and fairness opinion of the registered valuer, if any, and the declaration that the valuation report is available for inspection at the registered office of the company; (d) details of capital or debt restructuring, if any; (e) rationale for the compromise or arrangement; (f) benefits of the compromise or arrangement as perceived by the Board of directors to the company, members, creditors and others (as applicable) ; (g) amount due to unsecured creditors. (vi) disclosure about the effect of the compromise or arrangement on: (a) key managerial personnel; (b) directors; (c) promoters; (d) non-promoter members; (e) depositors; (f) creditors; (g) debenture holders; (h) deposit trustee and debenture trustee; (i) employees of the company: (vii) Disclosure about effect of compromise or arrangement on material interests of directors, Key Managerial Personnel (KMP) and debenture trustee. Explanation - For the purposes of these rules it is clarified that- (a) the term 'interest' extends beyond an interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany is situated, or such newspapers as may be directed by the Tribunal and shall also be placed, not less than thirty days before the date fixed for the meeting, on the website of the company (if any) and in case of listed companies also on the website of the SEBI and the recognized stock exchange where the securities of the company are listed: Provided that where separate meetings of classes of creditors or members are to be held, a joint advertisement for such meetings may be given. 8. Notice to statutory authorities.- (1) For the purposes of sub-section (5) of section 230 of the Act, the notice shall be in Form No. CAA.3, and shall be accompanied with a copy of the scheme of compromise or arrangement, the explanatory statement and the disclosures mentioned under rule 6, and shall be sent to.- (i) the Central Government, the Registrar of Companies, the Income-tax authorities, in all cases; (ii) the Reserve Bank of India, the Securities and Exchange Board of India, the Competition Commission of India, and the stock exchanges, as may be applicable ; (iii) Other sectoral regulators or authorities, as required by Tribunal. (2) The notice to the authorities mentioned in sub-ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orised officer of such body corporate shall be lodged with the company at its registered office not later than 48 hours before the meeting. (3) No person shall be appointed as a proxy who is a minor. (4) The proxy of a member or creditor blind or incapable of writing may be accepted if such member or creditor has attached his signature or mark thereto in the presence of a witness who shall add to his signature his description and address : provided that all insertions in the proxy are in the handwriting or the witness and such witness shall have certified at the foot of the proxy that all such insertions have been made by him at the request and in the presence of the member or creditor before he attached his signature or mark. (5) The proxy of a member or creditor who does not know English may be accepted if it is executed in the manner prescribed in the preceding sub-rule and the witness certifies that it was explained to the member or creditor in the language known to him, and gives the member's or creditor's name in English below the signature. 11. Copy of compromise or arrangement to be furnished by the company.- Every creditor or member entitled to attend the meeti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed for the purposes of or in connection with scheme for the reconstruction of any company or companies, or for the amalgamation of any two or more companies, the petition shall pray for appropriate orders and directions under section 230 read with section 232 of the Act. (3) Where the company fails to present the petition for confirmation of the compromise or arrangement as aforesaid, it shall be open to any creditor or member as the case may be, with the leave of the Tribunal, to present the petition and the company shall be liable for the cost thereof. 16. Date and notice of hearing.- (1) The Tribunal shall fix a date for the hearing of the petition, and notice of the hearing shall be advertised in the same newspaper in which the notice of the meeting was advertised, or in such other newspaper as the Tribunal may direct, not less than ten days before the date fixed for the hearing, (2) The notice of the hearing of the petition shall also be served by the Tribunal to the objectors or to their representatives under sub-section (4) or section 230 of the Act and to the Central Government and other authorities who have made representation under rule 8 and have desired to be h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies, the statement in Form No. CAA.8 along with such fee as specified in the Companies (Registration Offices and Fees) Rules, 2014 within two hundred and ten days from the end of each financial year. 22. Report on working of compromise or arrangement.- At any time after issuing an order sanctioning the compromise or arrangement, the Tribunal may, cither on its own motion or on the application of any interested person, make an order directing the company or where the company is being wound-up, its liquidator, to submit to the Tribunal within such time as the Tribunal may fix, a report on the working of the said compromise or arrangement and on consideration of the report, the Tribunal may pass such orders or give such directions as it may think fit. 23. Liberty to apply.- (1) The company, or any creditor or member thereof, or in case of a company which is being wound-up, its liquidator, may, at any time after the passing of the order sanctioning the compromise or arrangement, apply to the Tribunal for the determination of any question relating to the working of the compromise or arrangement. (2) The application shall in the first instance be posted before the Tribunal for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion or the meeting of members or class of members or creditors or class Of creditors, file a copy of the scheme as agreed to by the members and creditors, along with a report of the result of each or the meetings in Form NO. CAA. 11 with the Central Government, along with the fees as provided under the Companies (Registration Offices and Fees) Rules, 2014. (b) Copy of the scheme shall also be filed, along with Form NO. CAA. 11 with - (i) the Registrar of Companies in Form No. GNL-1 along with fees provided under the Companies (Registration Offices and Fees) Rules, 2014; and (ii) the Official Liquidator through hand delivery or by registered post or speed post. (5) 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. (6) Where objections or suggestions are received from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Of valuation addressed to the Board of directors of the company giving justification for such valuation. (2) In the case of an unlisted company and a private company, (i) the offer price shall be determined after taking into account the following factors:- (a) the highest price paid by the acquirer, person or group of persons for acquisition during last twelve months; (b) the fair price of shares of the company to be determined by the registered valuer after taking into account valuation parameters including return on net worth, book value of shares, earning per share, price earning multiple vis-å-vis the industry average, and such other parameters as are customary for valuation of shares of such companies; and (ii) the registered valuer shall also provide a valuation report on the basis of valuation addressed to the board Of directors of the company giving justification for such valuation. 28. Circular containing scheme of amalgamation or merger.- (1) For the purposes of clause (a) of sub-section (1) of section 238 of the Act, every circular containing the offer of scheme or contract involving transfer of shares or any class of shares and recommendation to the member ..... X X X X Extracts X X X X X X X X Extracts X X X X
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