The terms of the merger shall be laid down by the board of directors of each undertaking. The plan is prepared and submitted for approval. For example, the High Court and the Securities and Exchange Board of India (SEBI) must approve the shareholders of the new entity when a plan is submitted. iv. In the event of a difference in the accounting directive between the transferring company and the transferring company, the effects of the latter shall be quantified until the merger and adjusted in the reserves of the transferring company in order to ensure that the financial statements of the transferring company reflect the financial situation on the basis of a consistent accounting and valuation directive. In November 2015, the pharmaceutical group Natco Pharma obtained the shareholders` agreement to merge its subsidiary Natco Organics into the company. The results of the postal vote and the e-vote showed that the resolution was adopted by 99.94% yes, 0.02% against and 0.04% null. On the other hand, if too much competition is cut off, the merger can create a monopoly that can be a problem for consumers and the market. It can also lead to a downsizing of the new company, as some jobs are duplicated and, as a result, some employees become obsolete.
It also increases the debt: by merging the two entities, the new entity takes over the commitments of both companies. Subject to the other provisions of the system, all contracts, instruments, obligations, agreements, including leases and licences and other instruments in which the transferring company is involved, which exist or are in force immediately before or after the date of entry into force, remain in full force and effect against or in favour of the transferring company and are, for the transferring company, the transferred company may apply it fully and effectively, as if it had been, at any essential moment, a party to it. In accounting, groupings can also be called consolidations. In the United States, the term amalgam has generally fallen out of general use and has been replaced by the terms merger or consolidation. But it is still widely used in countries like India. The operations of the transferred company are continued after the merger. No adjustment of the book values shall be made. The shareholders of the transferring company, who hold a nominal value of at least 90% of the shares, become shareholders of the transferring company.
a. the approval and approval of the system with the required majorities in number and value of the classes of persons of the transferred company, which are awarded by the High Court of …… and the transmission company, as by the High Court of …. On the requests for instructions referred to in section 391 of the Act for the calling of meetings and the necessary decisions taken under the law to that effect; iii. Any difference between the amount recorded as fresh share capital issued by the transferring company at the time of the merger and the amount of the share capital of the transferring company shall be recognised in general reserves. . . .