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CS Professional · Corporate Restructuring, Valuation and Insolvency · Fast Track Mergers

Alpha Textiles Ltd and its wholly-owned subsidiary Beta Yarns Pvt Ltd propose a fast track merger under section 233. As the first step in the procedure, what must the transferor and transferee companies do regarding the proposed scheme?

The companies must first issue a notice of the proposed scheme inviting objections or suggestions within thirty days from the Registrar, Official Liquidators of the places of their registered offices, and persons affected. This is the opening step under section 233(1)(a), before member and creditor approvals.

  1. AFile the scheme directly with the Tribunal for sanction
  2. BIssue a notice of the proposed scheme inviting objections or suggestions from the Registrar, Official Liquidators and persons affected within thirty daysCorrect
  3. CObtain prior approval of the Reserve Bank of India
  4. DWait for the Central Government to invite objections within sixty days

Explanation

Section 233(1)(a) requires the transferor and transferee companies to issue a notice of the proposed scheme inviting objections or suggestions within thirty days from the Registrar, Official Liquidators where registered offices are situated, and persons affected. The Tribunal is not the first forum, and RBI approval relates to foreign company mergers.

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