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CS Professional · Corporate Restructuring, Valuation and Insolvency · Planning and Strategy

Meru Autos Ltd and Satpura Components Ltd are merging under a sanctioned scheme. The scheme fixes the appointed date as 1 April, and the Tribunal order is received on 20 September. The scheme becomes effective only when certified copies of the order are filed with the Registrar. For integration planning, which statement is correct?

The scheme becomes legally effective when the certified Tribunal order is filed with the Registrar, while the accounting effect runs from the appointed date stated in the scheme. The appointed date and effective date are distinct, and the filing is mandatory, not optional.

  1. AOperational control must be physically merged on 1 April, before the Tribunal order
  2. BThe scheme takes legal effect on filing the certified order with the Registrar, though accounting is given effect from the appointed date as per the schemeCorrect
  3. CThe appointed date automatically becomes the date of the Tribunal order
  4. DFiling with the Registrar is optional once the Tribunal has sanctioned the scheme

Explanation

The appointed date is the date from which the scheme operates for accounting and tax purposes as stated in it, while the effective date is when the sanctioned order is filed with the Registrar. The two dates are distinct. Filing is mandatory, so the other options are wrong.

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