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CS Professional · Corporate Restructuring, Valuation and Insolvency · Process of M&A Transactions

Tara Ltd merged into its holding company Zenith Ltd under the fast-track route. Tara had paid fees on authorised capital of ₹2 crore earlier. Zenith's authorised capital is enhanced by the merger. How are fees treated when Zenith files for revised authorised capital?

Tara's earlier fees are set off against the fees payable by Zenith on its enhanced authorised capital. The transferee files with the Registrar and pays prescribed fees on revised capital, but the proviso gives credit for fees the transferor already paid.

  1. AZenith pays full fees on the revised capital; Tara's fees are forfeited
  2. BFees paid by Tara on its authorised capital are set off against fees payable on Zenith's enhanced capitalCorrect
  3. CNo fees are payable on the enhanced capital
  4. DTara's fees are refunded to its shareholders

Explanation

Section 233(11) requires the transferee to file an application with the Registrar with the registered scheme, indicating revised authorised capital and paying prescribed fees. The proviso sets off fees already paid by the transferor on its authorised capital against fees payable by the transferee. Full fees without set-off or no fees at all are both wrong.

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