Consolidation is a restructuring tool available to Indian conglomerates who aim to grow and diversify their businesses for a variety of reasons whether to gain competitive advantage, reduce costs or open prices. In commercial terms, a merger actually means an arrangement in which one or more existing companies merge their ownership with another existing company or form a new separate business. The company law in India is still in full swing and a new law was finally passed in 2013. However, only 98 sections of the Companies Act, 2013 have been implemented and the provisions relating to consolidated mergers Sections 230 to 240 are yet to be announced. Until then, this court-administered procedure will continue to be governed by Section 391-396A of the Companies Act, 1956 and the Companies Act, 1959.
This article describes the key changes introduced by the 2013 Act regarding mergers, which is a term, in a similar way, used interchangeably under consolidation under Indian law. In addition, it is intended to compare those changes with the 1956 Act.
