AMENDMENT – NEW RULES – The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2020
The Central Government hereby makes the following rules, further to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, namely:-
In the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, (hereinafter referred to as the principal rules), in rule 3, after sub-rule (4), the following sub-rules shall be inserted, namely: –
“(5) A member of the company shall make an application for arrangement, for the purpose of takeover offer in terms of sub-section (11) of section 230, when such member along with any other member holds not less than three-fourths of the shares in the company, and such application has been filed for acquiring any part of the remaining shares of the company.
Explanation I. – “shares” means the equity shares of the company carrying voting rights, and includes any securities, such as depository receipts, which entitles the holder thereof to exercise voting rights.
Explanation II.-Nothing in this sub-rule shall apply to any transfer or transmission of shares through a contract, arrangement or succession, as the case may be, or any transfer made in pursuance of any statutory or regulatory requirement.
(6) An application of arrangement for takeover offer shall contain:
(a) the report of a registered valuer disclosing the details of the valuation of the shares proposed to be acquired by the member after taking into account the following factors: –
(i) the highest price paid by any person or group of persons for acquisition of shares during last twelve months;
(ii) the fair price of shares of the company to be determined by the registered valuer after taking into account valuation parameters including return on net worth, book value of shares, earning per share, price earning multiple vis-d-vis the indushy average, and such other parameters as are customary for valuation of shares of such companies.
(b) details of a bank account, to be opened separately, by the member wherein a sum of amount not Iess than one-half of total consideration of the takeover offer is deposited.”.
3. In the principal rules, there is change in schedule of Fees which is as follows:
|1||Sub-section (1) of section 230||3||Application compromise arrangement amalgamation||Rs.5,000/|
Further the NCLT Rules got amended with new rules i.e. the National Company Law Tribunal (Amendment) Rules, 2020 with insertion of the following to make the above said changes effective through the proper forum.
In the National Company Law Tribunal Rules, 2016 (hereinafter referred to as the principal rules), after rule 80, the following rule shall be inserted, namely:-
“80A. Application under section 230. – An application under sub_ section (12) of section 230 may be made in Form NCLT-1 and shall be – accompanied with such documents as are mentioned in Annexure B.”.
SCHEDULE OF FEES, after S.No.22 and the entries relating thereto, the following shall be inserted, namely:-
|22A||Sec 230(12)||Application in cases of takeover offer of companies which are not listed||Rs. 5,000|
“Annexure-B”, after S.No.12 and the entries relating thereto, the following S.No. shall be inserted, namely:-
|12A||Sec 230(12)||Application in cases of takeover offer of companies which are not listed||l. Affidavit verifying the petition
2. Memorandum of appearance with copy of the Board’s Resolution or the executed vakaltnama, as the case may be.
3. Documents in support of the grievance against the takeover.
4. Any other relevant document.
DISCLAIMER: The information given in this Note has been made on the basis of the provisions stated in the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2020 and the National Company Law Tribunal (Amendment) Rules, 2020 .It is based on the analysis of the facts and our understanding and interpretation of applicable laws as on date. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this note. Mritunjay Shekhar & Associates, New Delhi