AMALGAMATIONS,RECONSTRUCTIO

NS, ARRANGEMENT AND

COMPROMISES

Presented by :
 Leena Jhadhav
 Priyanka Shelatkar
 Rupali Gavde
 Abhishek Kotkar
 Sagar Lahoti
 Vivek Bhoyar
 Anand Lihinar
 Sameet Gajakosh
ARRANGEMENTS & COMPROMISES
(SEC. 391,392,393 & 394 A)

 Arrangement includes a reorganization

of the share capital of the co. by the
consolidation of the shares of different
classes, or by division of the shares of
different classes or by both those methods.

 Compromise implies the existence of

dispute, relating to rights, which its seeks
to settle
Compromise or Arrangement (C or A) is
proposed between …

1. A company & its creditors or

2. A company & its members

- On an application of the company or
any creditor or member or liquidator
where the co. is being wound-up
Disclosure of Terms of C or A
1. A statement stating all the terms of the
proposal, its effects, state any material interests
of the directors, effects of those interest

2. Not only the terms of the scheme is stated but

the effect of the scheme must be explained

3. Where the C or A affects the rights of

debenture holders
If Default is made…..
• If the co. or any officer of the co. defaulted in
complying with the furnishing of the statements
shall be punishable with a fine of Rs. 50,000

• If any director, MD or manager & every trustee

for debenture holders of the co. defaulted to
give notice of such matters to the co. shall be
punishable with a fine of Rs. 5,000
Sagar
Power of High Court to enforce
Compromises and Arrangements
Where a High court makes an order, sanctioning a
compromise or an arrangement in respect of a
company, it-

(i) Shall have power to supervise the carrying out of the

compromise or arrangement; and

(ii) May, at the time of making such order or at any time there after,
give such directions in regard to any matter or make such
modifications in the compromise or arrangement as it may
consider necessary for the proper working of the compromise or
arrangement.

If the court is satisfied that the compromise or arrangement

sanctioned, cannot be worked satisfactory with or without
modifications, it may make an order winding up the company
Preservation of Books and Papers of
Amalgamated Companies
 Books and Papers of a company which has been
amalgamated with, or whose shares have been acquired
by another company, shall not be disposed without
permission of the Central Govt.

 Before granting such permission, the Central Govt. may

appoint a person to examine the books and papers for the
purpose of Ascertaining whether they contain any
evidence of the commission of an offence in connection
with the promotion or formation, or the management of
the affairs, of the first mentioned company or its
amalgamation or the acquisition of its shares.
Vivek
Priyanka
Acquisition of Shares of Share holders Dissenting
from Scheme or Contract Approved by Majority
 Regulations while the transfer of shares takes place by the
mode of any specific scheme or a contract

: Where a scheme or contract involving the transfer of shares in a

company (transferor company) to another company(transferee
company), within four months after making of the offer in that behalf by
the transferee company, has been approved by the holders of not less
than nine-tenths in value of the shares whose transfer is involved, the
transferee may, at any time within two months after the expiry of the
said four months, give notice to any dissenting shareholder, that it
desires to acquire his shares.

 After such a notice Transferee Co. shall be entitled to acquire those

shares under the terms of contract or scheme, unless on an application
made by dissenting shareholder within one month from the date notice
was given.
Acquisition of Shares of Share holders Dissenting
from Scheme or Contract Approved by Majority
 What do you mean by Dissenting Share holder ?

 Offer to the Shareholders to sell their shares at a

stated price

 Offers is to busy shares either for cash or in

exchange for the shares of the transferee
company

 The court will consider the application of

dissenting shareholders if the scheme is unfair