Author(s)- Sundaram Dhari, Manya Ranjan, New Law College, Bharati Vidyapeeth University, Pune


This Article gives brief about the expression Amalgamation, and the Procedure for Amalgamation under Companies Act,2013 according to the Amendment of 2016. This includes all the important points in the procedure of Amalgamation. Additionally, it looks forward to the need, scope for Amalgamation. The paper will give the quick idea of the old sustaining expression along with modern application of it. The article also gives a flying visit to the conditions for Merger to qualify as an Amalgamation.

KEYWORDS- Amalgamation, Procedure, Notice, Application, Arrangement, Compromise.


Amalgamation is commonly governed by the different provisions of Companies Act 2013, Competition Act 2002, Foreign Exchange Management Act 1999, The Indian Income Tax Act (ITA) 1961 and SEBI regulations. In this Article we will discuss about the term Amalgamation and the Procedure specified of the same under Companies Act, 2013 after the Amendments of 2016.

Amalgamation in simple terms is an ‘reconstruction’ or ‘arrangement’. It is a legal process by which two or more companies are united together to form a new entity or one or more companies are to be absorbed or merged with another and as a consequence the amalgamating company loses its existence and its shareholders become the shareholders of new company or the amalgamated company.[1] Amalgamation is done either in the nature of merger or in the nature of purchase.

The definition of Amalgamation is given in Income Tax Act,1961 under Section 2(1B) which states that- “amalgamation”, in relation to companies, means the merger of one or more companies with another company or the merger of two or more companies to form one company (the company or companies which so merge being referred to as the amalgamating company or companies and the company with which they merge or which is formed as a result of the merger, as the amalgamated company) in such a manner that—


(i) all the property of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation;


(ii) all the liabilities of the amalgamating company or companies immediately before the amalgamation become the liabilities of the amalgamated company by virtue of the amalgamation;


(iii) shareholders holding not less than three-fourths in value of the shares in the amalgamating company or companies (other than shares already held therein immediately before the amalgamation by, or by a nominee for, the amalgamated company or its subsidiary) become shareholders of the amalgamated company by virtue of the amalgamation,

otherwise, then as a result of the acquisition of the property of one company by another company pursuant to the purchase of such property by the other company or as a result of the distribution of such property to the other company after the winding up of the first-mentioned company.[2]


  • Orderly redirection of the operations of the business.
  • Deploying one company’s surplus cash to fund sustainable development in another.
  • Exploiting inter-dependence within the corporate portfolio of current or prospective companies.
  • The Avoidance of Risks.
  • Core competence growth.



Economic enhancement (cost reduction) and (profitable) efficiency improvement. If a business wishes to thrive in a competitive market or survive, it needs to restructure itself and concentrate on its competitive environment. Amalgamation has some key benefits for the business amalgamating, as it helps to knock out competition in the Market, helps in Tax saving, increases value of shares etc.

Some of the famous and known Amalgamations in India are-

1.Two leading Nationalised Bank in India under the ownership of Ministry of Finance, Government of India by way of announcement on 30th August 2019 by the Finance Minister Nirmala Sitharaman were amalgamated, namely Syndicate Bank with Canara Bank.

  1. Maruti Udyog limited, an Indian automotive manufacturer and Suzuki Motor Corporation, a Japanese automotive manufacturer amalgamated to form a new company called Maruti Suzuki (India) Limited.
  2. Tata group and American International Group (AIG) amalgamated to form a general insurance company based in India, named Tata AIG General Insurance Company Limited.
  3. PVR Ltd amalgamated with Bijli Holdings Pvt Ltd to simplify PVR’s shareholding structure.

Likewise, there are many more examples of Amalgamations between different business groups in India and abroad.


  • By way of amalgamation, all the property of the amalgamating company (old) immediately before the amalgamation becomes the property of the amalgamated company (new).
  • By way of amalgamation, all liabilities of the amalgamating company immediately prior to the amalgamation become the property of the amalgamated company.
  • By virtue of the amalgamation, shareholders holding not less than three-fourths of the value of the shares in the amalgamating company (other than shares already owned in the amalgamating company immediately before the amalgamation by or through the candidate for the amalgamated company or its subsidiary) shall become shareholders of the amalgamated company.
  • The business of the transferor company (the company which is amalgamated into another company) to be further carried on after the amalgamation by the transferee company (the company into which a transferor company is amalgamated).



According to the Notification by, The Ministry of Corporate Affairs, Government of India, vide dated 14th December 2016 has issued rules i.e. the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. These rules came into effect from 15th December, 2016. As a consequence, i.e. 15th December 2016, all compromises, arrangements and mergers have been implemented in accordance with the Companies Act 2013 (essentially Sections 230, 231 and 232) and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.[3]

Board Meeting

The company shall initially convene a meeting of the board of directors where it is decided to amalgamate with another company.

Application to Tribunal

An application shall then be made by the company in Form no. NCLT-1 to the applicable territorial jurisdiction of the National Company Law Tribunal. The request is followed by an application.

  1. Notice of admission specified in Form No. NCLT-2
  2. An affidavit in Form No. NCLT-6
  • A copy of the compromise or arrangement scheme
  1. Fee as mentioned in the Schedule of Fees.

Notice of The Meeting

Notice of the meeting shall be sent to all the creditors or groups of creditors and to all the members or class of members and the debenture-holders of the company, in Form No. CAA.2.

The notice shall be sent by the chairperson appointed for the meeting, or, where the Tribunal so directs, by the company or by any other person whom the Tribunal may direct, by registered post or speed post, by courier, by e-mail, by hand delivery, or by any other means, as directed by the Tribunal to its last known address at least one month before the meeting date.

A copy of the compromise or arrangement scheme and a document disclosing the information of the compromise or arrangement shall accompany the notice of the meeting to the creditors and members.


The notice of the meeting shall be advertised in Form No. CAA.2 in at least one English newspaper and at least one national newspaper with a broad circulation in the State of registration of the company’s registered office. A copy of the notice must also be posted on the company’s website, not less than thirty days before the date set for the meeting.

It should be noted that a joint advertising may be issued by the two firms.

Notice to Statutory Authorities

The above notice shall also be sent to the Central Government, to the income tax authorities, to the Reserve Bank of India, to the Registrar of Companies, to the Official Liquidator, to the Competition Commission of India and to any other sectoral regulators or bodies which are likely to be affected by the amalgamation in form CAA-3., along with a copy of the compromise or arrangement scheme.

If the authorities referred to above intend to make some representation, such representation shall be sent to the Tribunal within a period of thirty days from the date of receipt of such notification, and a copy thereof shall be sent simultaneously to the companies concerned.

Affidavit of Service

The chairperson appointed to the meeting shall file an affidavit with the Tribunal not less than seven days before the date set for the meeting or the first of the meetings, or any other person appointed to issue an advertisement and a notice of the meeting, specifying, as the case may be, that the directions relating to the issuance of notices and the advertisement have been issued.

Convene Meeting

The next step is to convene a meeting of members, creditors or a group of them to accord sanction to the scheme. The scheme is said to be sanctioned in the meeting where majority of persons representing three-fourths in value of the creditors, or class of creditors or members or class of members, as the case would be, voting in person or by proxy or by postal ballot, agree to it.


Petition for confirming compromise or arrangement

The company (or its liquidator) shall, within seven days of the Chairperson’s submission of the report, lodge a petition with the Tribunal on Form No. CAA.5 in order to authorise the amalgamation scheme. In the event of the company’s failure to file a petition, the company shall be available to any creditor or member, as the case may be, with the leave of the Tribunal, and the company shall be responsible for the expense of the petition.[4]

Date and notice of hearing

  1. The date of the hearing of the petition shall be fixed by the Tribunal and the notice of the hearing shall be published in the same newspaper in which the notice of the meeting was published, or in any other newspaper which the Tribunal may order, not less than ten days before the date fixed for the hearing.
  2. The notice of the hearing of the petition shall also be served by the Tribunal, pursuant to subsection ( 4) of section 230 of the Act, to the objectors or their members and to the central government and other authorities who have made representations pursuant to Rule 8 and have wished to be heard on their behalf.

Order on Petition

Where the Tribunal sanctions for the compromise or arrangement, the order shall include such directions in regard to any matter or such modifications in the compromise or arrangement as the Tribunal may be of the view, think fit to make for the proper working of the compromise or arrangement.

It shall be in Form No. CAA. 6, with such variations as may be necessary.

The company shall cause a certified copy of the order to be filed with the Registrar for registration within thirty days of the receipt of certified copy of the order.

The scheme shall distinctly indicate an appointed date from which it shall be effective and the scheme shall be deemed to be effective from such date and not at a date subsequent to the appointed date.

The company shall, until the completion of the scheme, file a statement in such form and within such time as may be prescribed with the Registrar every year duly certified by a chartered accountant or a cost accountant or a company secretary in practice specifying whether the scheme is being complied with in accordance with the orders of the Tribunal or not.



In conclusion, in the Indian sense, Amalgamation as a term has progressed from a mere codification in the early decades of the independent existence of our country to a new age where Indian markets have become a game-changer in today’s global corporate economy.

This reform in the incumbent act has reshaped the association mechanism relating to mergers, making it a viable choice for different firms seeking an expeditious solution in relation to trade barriers and obstacles such as aversion to lengthy, drawn-out litigation. Amalgamation is a key point to be considered to eliminate competition in the market. It also helps the business to achieve more growth and gain in the market.

[1]What is Amalgamation

[2] Income Tax Act,1961

[3] Companies (Compromises, Arrangements and Amalgamations) Rules, 2016

[4] Company Law book by Avatar Singh


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