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CS Professional · Corporate Restructuring, Valuation and Insolvency · Documentation - Merger and Amalgamation

Meera Industries Ltd's Tribunal has ordered a meeting of equity shareholders to approve a merger scheme. Which of the following about the notice of that meeting is correct?

The notice must go to every shareholder with an explanatory statement giving the scheme's terms and its effect on shareholders, directors and key managerial personnel. Informed consent requires disclosure before the meeting, so supplying terms only at the meeting or limiting notice to large holders is wrong.

  1. AThe notice must be accompanied by a statement setting out the scheme's terms and the effect of the arrangement on shareholders, directors and key managerial personnelCorrect
  2. BThe notice need only state the date and place; terms of the scheme may be supplied at the meeting
  3. CThe notice is issued by the Registrar of Companies on the company's behalf
  4. DThe notice must be sent only to shareholders holding more than 10% of the shares

Explanation

The notice of a Tribunal-convened meeting must be sent to each member with an explanatory statement disclosing the terms of the scheme, the interests of directors and key managerial personnel and the effect on various classes. Supplying terms only at the meeting would deny shareholders informed consent. The company, not the ROC, issues the notice, and it goes to all members.

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