MODULE 3- Under Companies Act

2 March
M&A under Companies Act- Section 230 to 240.
Each section provides certain essential for successful completion of a M&A scheme or a
scheme in general.
Heading of the chapter-XV says that, ‘Compromiser Arrangement and Amalgamation’. In
1956 it used to be ‘Arbitration, compromise, arrangement and amalgamation and
restructuring’. Two words were removed from this heading.
For the three words which are removed from the heading-
For ‘Arbitration’, erstwhile Companies Act, the power was vested with Company Law Board
to transfer the dispute or matter to arbitration. That is why, Arbitration was included in this
particular chapter. Even before the enactment of arbitration and Conciliation Act, this
provision was removed from the Companies Act. Subsequent to the enactment of A&C Act,
there was no need for having a provision for conducting Arbitration proceedings under the
Companies Act.
Reconstruction- It happens within the company and outside the company as well.
A situation when the entity constructed is not suitable, or not fulfilling the desired purpose, is
majorly considered a situation for reconstruction. For example, under IBC, the entity fails to
perform in the desired manner, then the recourse to reconstruction in name of revival of sick
unit takes place. For this reason, it was removed from Companies Act, and partially shifted
in IBC.