Which companies are allowed to merge? Companies Act, 2013 does not prescribe any eligibility requirements of companies for the merger. However, it prescribes several questions which will be answered in further lines.
Companies which are raising funds from angel investors or through venture capital funds are in dilemma which instrument is required to be issued against the investment. The decision is taken by the investors in general to which instrument they should get against their investment.
Promoters engaged in the business not for profit ideally go for registering a company under Section 8 of the Companies Act, 2013. Once a company is registered under Section 8 either as a public or private such company is free from not using the words private limited or public limited after the key word of the company. A partnership firm can also become a member of Section 8 Company. These companies often find it difficult to shut down the company as this company is having the license to operate as Charitable Company it is required to surrender that license by converting the company into a normal company other than a Section 8 Company. For the purpose of conversion of the company into a normal company the company is required to have the following things in order.
