Clarification under section 232(6) of the Companies Act, 2013
The Ministry of Corporate Affairs (MCA) on 21st August, 2019), issued Clarification regarding “appointed date” in the scheme of mergers and amalgamations under the Companies Act, 2013 (“The Act”).
Provisions of Section 232
Section 232 of The Act states that scheme shall be deemed to be effective from the “Appointed date” and not a date subsequent to the “appointed date”. This is the enabling provision to allow the companies to decide and agree upon an appointed date from which the scheme come into force.
Clarifications:
- The clarification enables the companies to choose a specific calendar date or the date of fulfilling the requirement agreed among the parties or the occurrence of the grant from the competent authorities.
- It is clarified that the appointed date may precede the date of filing of application for the said scheme in National Company Law Tribunal (NCLT).
- Further it is specifically required to mention in the scheme that “it should not be against public interest” if the appointed date is beyond a year from the date of filing of application to the NCLT.
- It is required to file an Intimation with the Registrar of Companies within 30 days in case the appointed date is subsequent to the date of filing of application with Registrar under section 232(5) of The Act.
Conclusion
This would allow the companies concerned to function independently till such event is actually materialized.
Hence, the date identified as “appointed date” under the scheme shall be deemed as “acquisition date” and date of transfer of controls under the IND-AS 103 (Business Combination).
