Services

Amalgamation, Merger, De-merger & Takeover

Mergers and Acquisitions

Merger and Acquisition are corporate strategies of buying, selling and combining of different companies. They help the entities involved to grow rapidly in their sectors or to flourish in a new field.

In Merger of a company, two or more companies combine to work as a single company with mutual agreement while in acquisitions, one company buys majority shares of another company to gain ownership and control over it. Acquisition can either be friendly or can be hostile. There are various types of mergers can be possible. Depending upon the type company and industry we provide from  advisory to final payment services to the client

Demerger

Demerger of a company can be defined as a division or split of a company in a number of small companies. The new company may not necessarily be a subsidiary of the parent company after the split.

In other words, demerger, is a corporate partition of a company into smaller undertakings, where one separated undertaking is retained by the parent company while others are either acquired by other, work independently, liquidated or are sold.

Companies opt for demergers mainly due to the following reasons:

1. When the company aims for restructuring of its corporate position to adjust to the changing political and economic environment of the country
2. Corporate restructuring helps to exploit opportunities effectively to optimize the use of resources when the parent company is not able to do so.
3. If the company got engaged in a business without any expertise or experience and has thus not been able to earn profits.
4. To realize capitals gains out of the assets those are underperforming.
5. Demerger of a company helps in selling unwanted, surplus or unconnected parts of the business. This way you get rid of the sick part of your company.

Liquidation and voluntary Winding Up of Companies

Winding up is a method through which the disintegration of a company is brought about and also its assets are realised as well as used in the return of its debts. Once the debts are satisfied then the remaining balance (if in case any) is actually paid back to the members in percentage to the offering made by them to the capital of the company.

The process of Voluntary Winding up of a company actually begins when a company becomes insolvent and is incapable to discharge its liabilities. In order to carry out voluntary winding up for a private limited company, a winding up meeting needs to be called wherein a verdict is given for carrying out the winding up procedure of the company. It is necessary that the creditor’s winding up meeting must be held either on the days fixed for General meeting or on the very next day.

Winding up can be initiated by Creditors, members or voluntary by promoters

Hence, winding up eventually leads to the disintegration of the company. In between winding up and dissolution, the legal entity of the company is left and it can be sued in the Tribunal of law.

Reduction of Share Capital

For any company, a capital reorganization issue is a process by which restructuring takes place and surplus cash is returned to shareholders. The other diagonally opposite reasons for reduction of capital is that there is no cash, in fact, capital is lost. The need of reducing capital may arise in various circumstances, for example, accumulated business losses, assets of reduced or doubtful value. As a result, the original capital may either have become lost or a company may find that it has more resources that it can profitably employ. So, in either of these cases, the need will arise to adjust capital and assets.

As prescribed under section 66 of the Companies Act 2013, A company limited by shares or limited by guarantee and having a share capital by a special resolution may do the reduction of share capital in any manner subjected to confirmation by the NCLT on an application by the company.

It can reduce in particular, may—

1. In respect of the share capital not paid-up, extinguish or reduce the liability on any of its shares; or
2. Either with or without extinguish or reduction in liability on any of its shares,—

• Cancel any paid-up share capital that has been lost or is unrepresented by available assets,—
• Pay off any paid-up share capital that has been exceeding of the wants of the company,

It can alter its memorandum by reducing the amount of its share capital and of its shares accordingly