Fast Track Merger (Section 233) is that Form of merger which can be carried out without complying provisions of Section 230 & Section 232 of Companies Act 2013.
TYPES OF COMPANIES THAT CAN GO FOR FAST TRACK MERGERS
1. Two or more small companies,
2. Holding and its wholly owned subsidiary Company
3. Such class of Companies as may be prescribed
STEPS FOR FAST TRACK MERGER
1. A notice in Form No. CAA. 9 of the proposed scheme inviting objections or suggestions, if any, from the Registrar and Official Liquidator or persons affected by the scheme with in 30 days is issued by the transferor Company or Companies and transferee Company.
2. A declaration of solvency in Form No. CAA.10 along with the prescribed fees is required to be filed by each Company to the Registrar of the place where the registered office of the Company is situated before convening meeting of members and creditors for approval of the scheme.
3. The objections and suggestions received are considered in the respective general meetings and the scheme is approved by at least ninety percent of total members or class of members and nine-tenth in value of the creditors or class of creditors of respective companies.
4. Notice of the meeting of members and creditors shall be accompanied by
a) A statement referred in Section 230(3)
b) A declaration of Solvency in Form No. CAA.10.
c) A copy of the scheme
5. The transferee company shall with in seven days after the conclusion of the meeting of members or class of members or creditors or class of creditors, file a copy of the scheme in Form CAA.11 with the Central Government , in Form GNL-1 to Registrar of Companies with prescribed fees and by hand delivery or by registered or speed post to Official Liquidator.
6.. Where no objections are received from Registrar or Official Liquidator, the Central Government shall issue a confirmation order of such scheme in Form No. CAA. 12.
7. If the Registrar or Official Liquidator has any objections, he may communicate the same in writing to Central Government within a period of thirty days and if Central Government is of the opinion that whether on the basis of such objections or otherwise , that the scheme is not in public interest, it may file an application before the tribunal(NCLT) in Form No. CAA.13 with in sixty days of the receipt of the objections or opinion and requesting that Tribunal may consider the scheme under Section 232 of the ACT.
8. If the Tribunal on receipt of the application from Central government, is of the opinion that scheme should be considered as per the procedure laid down in section 232, the Tribunal ,may direct accordingly or it may confirm the scheme by passing such order as it deems fit.
9. The confirmation order of the scheme issued by the Central Governments or Tribunal as the case may be, shall be filed ,with in thirty days of the receipt of the order of Confirmation , in Form INC-28 with Registrar of Companies.
*It is clarified that with respect to schemes of arrangement or compromise falling within the purview of Section 233 of the Act, the concerned Companies , may at their discretion , opt to undertake such schemes under Section 230 & 232 of the Act.
* The registration of scheme shall be deemed to have dissolution effect without winding up.
* The registration of the scheme shall have the following effects, namely:—
(a) transfer of property or liabilities of the transferor company to the transferee company
(b) the charges, if any, on the property of the transferor company shall be applicable and enforceable as if the charges were on the property of the transferee company;
(c)legal proceedings by or against the transferor company pending before any court of law shall be continued by or against the transferee company; and
(d) where the scheme provides for purchase of shares held by the dissenting shareholders or settlement of debt due to dissenting creditors, such amount, to the extent it is unpaid, shall become the liability of the transferee company.
*A transferee company shall not on merger or amalgamation, hold any shares in its own name or in the name of any trust either on its behalf or on behalf of any of its subsidiary or associate company and all such shares shall be cancelled or extinguished on the merger or amalgamation.