Follow Us :
CS Ritu Nagpal

CS Ritu Nagpal

Merger and Amalgamation

The section has become effective w.e.f. 12-09-2013

Q.1 Can a section 8 company be amalgamated into manufacturing company? A. yes. As the purpose of the amalgamation of one company with another is to facilitate reconstruction of the amalgamating companies. Case Law: Sir Mathuradas Vissanji Foundation Vs. Walvis Flour Mills Co. Limited
Q.2 A newly incorporated companies without any business or assets can be amalgamated? A. Yes, there is no time bar to a company amalgamating even with 15 days old company, having no assets or business activities. Case Law: Apco Industry Limited
Q.3 Can a foreign company be amalgamated with an Indian company? A. As per section 394 of Cos. Act, 1956 don’t allow for the same. But, now in the new section 234(2) clearly supports this point and allows foreign company may, with the approval of RBI, merge into Indian company or vice-versa.

  • Branch of a foreign company can also be merged with its principal place of business in India.
  • Subsidiary company can also be merged with its holding company.
Case Law: Bombay Gas Co. vs. Essar oil Limited(1956)
Q.4 Single application under section 230 to 232 is enough for all alterations in the memorandum and articles? True. Amalgamation under section 230 to 232 does not require number of applications under the Companies Act, 2013 for various alterations in the memorandum and Articles of associations because 230 to 232 is in itself a complete code and can be incorporated in the scheme itself. Therefore, company not required to make separate application under Companies Act, 2013 for each alteration. Case Law: (i) Jaypee Greens Limited (2006)

(ii) Motorola India Limited



Q.5 Can a shareholder challenge the value of shares made by the chartered accountant at the time of amalgamation? No. No requirement in 1956 as well as in 2013. Case Law: Advance Plastics Pvt. Ltd. (2007)
Q.6 Whether stamp duty is payable on the increased authorised capital of the amalgamated company and whether holding company could mere with its subsidiary? In the case of Jaypee cement limited v. Jayprakash Industries limited(2004), it was held that the requisites fee/stamp duty having already been paid on the authorized capital of JPL, merely because of its merger with JCL, there is no reason why the same should be paid again by JCL on the same authorised capital. Case Law:  Jaypee cement Limited v. Jayprakash Industries limited(2004)


Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.


  1. CS RITU NAGPAL says:

    Thanks for the reply, As per section 8(10). your point is correct, but for your clarification Please refer Point No. 7.1 of chapter 1 of Merger & amalgamation. It clearly says that As the purpose of the amalgamation of one company with another is to facilitate reconstruction of the amalgamating companies.

  2. Hemal says:

    Dear Publisher,

    thanks for your comprehensive article. would just like to point out that as per the new Companies Act, 2013, pursuant to Section 8(10), A company registered under this section shall amalgamate only with another company registered under this section and having similar objects.
    in view of the aforesaid, unlike the provisions of the Companies Act, 1956, in accordance with the new provisions, the answer to the first question will be false as a section 8 company cannot be amalgamated with a manufacturing company.

    please let me have a view that is otherwise, if any.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
May 2024