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CS Executive · Company Law and Practice · Compromise, Arrangement and Amalgamations - Concepts

In 2010, under the Companies Act, 1956, a court sanctioned a compromise for Ratnagiri Foods Ltd. The Companies Act, 2013 has since commenced. Does section 231 have any application to this earlier order?

Yes. Section 231(3) says its provisions apply, so far as may be, also to a company in respect of which an order sanctioning a compromise or arrangement was made before the commencement of the Companies Act, 2013. No member consent is required.

  1. ANo, section 231 applies only to orders made after commencement of the 2013 Act
  2. BYes, only if all members of the company consent in a general meeting
  3. CYes, the provisions of section 231 apply, so far as may be, to a company in respect of which such an order was made before commencementCorrect
  4. DNo, such companies are governed only by the repealed Act's provisions

Explanation

Section 231(3) provides that the section applies, so far as may be, also to a company in respect of which an order sanctioning a compromise or arrangement was made before the commencement of the 2013 Act. No member consent is needed. Hence limiting it to post-commencement orders is incorrect.

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