Merger & Amalgamation
Merger and Amalgamation are two distinct corporate restructuring strategies—a Merger combines one company into another, while Amalgamation creates an entirely new entity by merging multiple companies.
- No Hidden Charges
- Lowest Price Guarantee
No Hidden Charges
Lowest Price Guarantee
Four Steps to Get Your Incorporation Certificate
Fill the Form
Provide business details
Add to cart
Pay the required fee online
Submit Documents
Upload required papers
Certificate delivery
Official Document Delivery
Find the best plan for your needs
Basic Plan
+GST
- Consultation on Removal Process
- Preparation of Required Documents
- Filing of Form DIR-11
Standard Plan
+GST
Basic Plan
+
- Share Certificate Transfer Assistance (If applicable)
- Assistance with DIR-3 KYC (if required)
Premium Plan
+GST
Standard Plan
+
- Digital Signature Certificate
- Assistance in Updating GST, PT, ESI, PF Records
- Dedicated Account Manager
What is a Merger?
A merger is when two or more companies combine to form a single entity. This helps businesses grow, improve efficiency, reduce costs, and expand market reach. In India, mergers are regulated under the Companies Act, 2013, along with rules from the Income Tax Act, 1961, Competition Act, 2002, and SEBI (for listed companies).
As per Sections 230-232 of the Companies Act, 2013, mergers require NCLT (National Company Law Tribunal) approval to ensure transparency and protect stakeholders.
Difference Between Merger & Amalgamation
Merger and Amalgamation are both forms of corporate restructuring, but they differ in their process, purpose, and legal outcomes. Below is a simple comparison
A Merger happens when one company takes over another.
Amalgamation creates an entirely new company by combining two or more companies.
Types of Mergers in India
Need to Update
Horizontal Merger
Vertical Merger
Conglomerate Merger
Reverse Merger
Amalgamation
Advantages of Merging Companies
Need to Update
Increased Market Share & Competitive Advantage
Stronger financial position and industry dominance.
Tax Benefits
Carry forward losses, reduced tax liabilities under Section 72A of the Income Tax Act.
Operational Efficiency
Cost savings, resource optimization, and better asset utilization.
Enhanced Investor Confidence
Merged companies attract more investments and funding opportunities.
Expansion & Diversification
Companies can enter new markets and expand their product offerings.
Documents Required for a Merger Application
Need to Update
Board Resolutions approving the merger
Audited Financial Statements of merging companies
Scheme of Arrangement (Merger Plan) with financial projections
NOC from SEBI, RBI, CCI (if applicable)
List of Shareholders & Creditors
Legal Notices & Approvals from Stakeholders
Valuation Report from a Registered Valuer
NCLT Sanction Order & ROC Filings
Merger Process
As per Companies Act, 2013 & NCLT Rules
- The Board of Directors of both merging companies must approve the merger proposal.
- A Scheme of Arrangement (Merger Plan) is drafted, including valuation reports, share exchange ratio, and financial impact.
- File an application under Sections 230-232 before the National Company Law Tribunal (NCLT).
- Submit all necessary documents, including Scheme of Arrangement, audited financial statements, creditors’ approval, and valuation report.
- A General Meeting must be conducted to seek approval from at least 75% of shareholders and creditors.
- Issue notices to creditors and statutory authorities like ROC, SEBI, CCI, and Income Tax Department.
- The NCLT reviews the merger scheme, ensures compliance, and hears objections (if any).
- Once satisfied, the NCLT sanctions the merger and issues an official order approving the merger.
- The merged entity files the NCLT-approved scheme with the Registrar of Companies (ROC).
- Update company records, PAN, GST, banking details, and employee contracts.
Note: Need to Update
Legal Provisions Governing Mergers in India
Need to Update
What is a Amalgamation?
Amalgamation is a process where two or more companies combine to form a completely new entity. Unlike mergers, where one company absorbs another, amalgamation leads to the creation of a new company that takes over the assets, liabilities, and operations of the merging entities.
In India, amalgamation is regulated under Sections 230-232 of the Companies Act, 2013, along with the Income Tax Act, 1961, the Competition Act, 2002, and SEBI regulations (for listed companies). Approval from the National Company Law Tribunal (NCLT) is required to ensure legal compliance and protect stakeholder interests.
Difference Between Merger & Amalgamation
Merger and Amalgamation are both forms of corporate restructuring, but they differ in their process, purpose, and legal outcomes. Below is a simple comparison
A Merger happens when one company takes over another.
Amalgamation creates an entirely new company by combining two or more companies.
Types of Amalgamation in India
Need to Update
Pooling of Interests Method
The assets, liabilities, and shareholders of the merging companies are combined at book value into the new entity.
Purchase Method
One company acquires another, and the acquired company's assets and liabilities are recorded at fair market value.
Advantages of Amalgamation for Companies
Need to Update
Business Growth & Market Expansion
Creates a larger, financially stronger company with a broader market reach.
Operational Efficiency & Cost Savings
Eliminates duplicate processes, reducing costs.
Improved Brand Value & Customer Confidence
A larger, more stable company gains more trust in the market.
Diversification & Risk Reduction
Spreads business risk across multiple sectors.
Increased Shareholder Value
Leads to higher valuation and better financial returns.
Tax Benefits
Companies can carry forward losses and reduce tax liabilities under Section 72A of the Income Tax Act.
Documents Required for an Amalgamation Application
Need to Update
Board Resolutions approving the amalgamation
NOC from SEBI, RBI, CCI (if applicable)
List of Shareholders & Creditors
Legal Notices & Approvals from Stakeholders
Audited Financial Statements of merging companies
NCLT Sanction Order & ROC Filings
Scheme of Amalgamation (Business Plan, Valuation Reports, Share Exchange Ratio)
Amalgamation Process
As per Companies Act, 2013 & NCLT Rules
- The Board of Directors of all involved companies must approve the amalgamation proposal.
- A Scheme of Amalgamation is prepared, covering:
- Valuation reports
- Share exchange ratio
- Impact on financials & business operations
- Apply under Sections 230-232 before the National Company Law Tribunal (NCLT).
- Submit necessary documents, including:
- Scheme of Amalgamation
- Audited financial statements
- List of shareholders & creditors
- Valuation reports
- Conduct a General Meeting to obtain approval from at least 75% of shareholders and creditors.
- Send notices to ROC, SEBI, CCI, and the Income Tax Department.
- NCLT reviews the amalgamation scheme and ensures compliance with the Companies Act.
- If no objections, the NCLT sanctions the amalgamation and issues an official order.
- The new company files the NCLT-approved amalgamation scheme with the Registrar of Companies (ROC).
- Update company records, PAN, GST, banking details, and employee agreements.
- Issue new share certificates to shareholders as per the share exchange ratio.
Note: Need to Update
Legal Provisions Governing Amalgamations in India
Need to Update
