The four legal routes for an Indian M&A
- Section 230–232 (NCLT route) — the standard route for mergers between any companies. Court-supervised: NCLT sanction, public objection period, creditor / shareholder consent.
- Section 233 (fast-track) — available for mergers between two or more small companies, between a holding and its wholly-owned subsidiary, between Section 8 companies, between start-ups, and between a start-up and a small company. Government / Regional Director approval, faster.
- Slump sale (Section 50B of Income-tax Act) — transfer of an undertaking as a going concern, without NCLT.
- Cross-border mergers — Section 234 + FEMA Cross-Border Merger Regulations 2018.
Restructuring situations we work on
Group restructurings — consolidating multiple subsidiaries; spinning off non-core businesses; merging family-owned holdcos into operating cos; pre-IPO restructuring; integration after acquisition; consolidation under FDI conditions; cross-border M&A entering or exiting India.
The Acts, Rules & Regulations that govern schemes
The relevant references:
- Companies Act 2013, Sections 230–240 — compromise, arrangement, mergers, demergers.
- NCLT Rules 2016.
- SEBI (Listing Obligations) Regulations for listed companies — pre-NCLT filing approval.
- Section 47 of the Income-tax Act — tax-neutrality conditions.
- Stamp Act — state-specific stamp duty on schemes.
- FEMA Cross-Border Merger Regulations 2018 for international combinations.
How we run a scheme end-to-end
- Structuring — right route (NCLT vs fast-track vs slump sale), tax neutrality, stamp-duty optimisation.
- Scheme drafting — clauses on appointed date, effective date, swap ratio, consideration, employee transfer, regulator approvals.
- Valuation report — share-swap or cash consideration, by registered valuer.
- Board and shareholder approvals.
- NCLT first-motion application — convening of meetings.
- Public notice — objections from creditors and shareholders.
- NCLT second-motion application — sanction.
- Stamp-duty payment.
- ROC filings — INC-28, e-form for the order, capital reduction (where applicable).
- Post-merger integration — tax registrations, GST migration, statutory book updates.
What you’ll need to share
- Latest audited financials of all merging / demerging entities.
- Shareholder lists, capital structure, corporate genealogy.
- Board resolutions and committee approvals.
- Existing inter-company agreements.
- Employee count, workforce contracts, statutory registrations.
- Property registers, lease agreements, encumbrance certificates.
- Litigation / contingent-liability schedule.
- Bank covenants, lender consents.
How long & how we charge
NCLT-route schemes typically take 6–9 months from board approval to effective date. Fast-track mergers take 3–4 months. Cross-border combinations can extend to 9–12 months. Fee depends on transaction value, complexity, and entity count — quoted on the discovery call.
Common questions on M&A schemes
Is a scheme tax-neutral by default?
No. Tax neutrality requires meeting Section 2(1B) and Section 47 conditions of the Income-tax Act — including consideration in equity, no asset re-valuation, etc. We structure to satisfy these.
Does stamp duty have to be paid in every state where the merging entities have property?
Generally yes — though several states have introduced rebates or exemptions for intra-group schemes. We map state-by-state stamp-duty exposure.
Can a merger be unwound after the NCLT order?
Practically very difficult. Pre-effective-date drop-off is possible (board can withdraw); post-effective unwind needs another scheme or court intervention.
Do listed entities need separate SEBI approval before NCLT?
Yes — the scheme must be cleared by SEBI / Stock Exchanges under Regulation 11 / 37 of LODR before the NCLT first-motion application.
Talk to our team.
A 30-minute call with our team — no deck, no follow-up email blasts. Just a read on whether we’re the right team to handle your M&A scheme.