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

Two years after Lakshya Pharma Ltd was amalgamated into Vistara Healthcare Ltd, an inquiry finds that the officers in default of Lakshya had committed an offence under the Companies Act, 2013 before the merger. Which statement is correct?

The liability of the transferor company's officers in default for the pre-merger offence continues after the amalgamation. The Companies Act, 2013 applies this notwithstanding any other law, so dissolution of the transferor and silence in the scheme do not remove it, and it is not shifted to transferee directors.

  1. AThe liability of those officers in default for the pre-merger offence continues after the amalgamationCorrect
  2. BThe liability ends on the effective date because the transferor company is dissolved
  3. CThe liability shifts wholly to the directors of Vistara Healthcare Ltd
  4. DThe liability continues only if the scheme expressly preserved it

Explanation

The Act provides that, notwithstanding any other law, liability for offences committed under the Act by officers in default of the transferor company before the merger shall continue after the merger. No express saving in the scheme is required, and dissolution does not extinguish it. The liability does not transfer to the transferee's directors.

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