Giridhar Babu
(Querist) 15 December 2009
This query is : Resolved
Pls. tell me how we can handle the following:
Actual: A (Indian Co.) is the 100% holding company of B, of which B is a foreign company. C (indian Co.) is the 100% subsidiary of B (Foreign Company). In this process C has become step down subsidiary of A.
Now the plan is to merge C (Stepdown Sub)with A (holding Co.). We feel that there is something we can do through extinguishing the shares. Is it really possible?
Raj Kumar Makkad
(Expert) 15 December 2009
No. It is not possible in the given process. You will have to seek permission of CLB for this purpose and a scheme shall have to be put forth before High Court of your State (where the registered office of co. A is situated).
Giridhar Babu
(Querist) 16 December 2009
Thank you Raj. Can you pls. tell me which way is better to merge both the companies? We are now considering 1. Merger through High court 2. Slump Sale 3. Itemized sale.
Pls. advice
Guest
(Expert) 18 December 2009
Sir, You can prepare a merger scheme and the two companies can well be merged. For which both the companies should approach the High Court for approval of scheme. If the companies are not sick companies, then, the scheme will automatically get approved without any difficulty. If you go for sale of assets by one company and purchase by another instead of due mergers under the provisions of law, then, there can be complications in the course. That will be an indirect and complicated route and the holding company may face some problems at times due to the complications in the understanding. Its my opinion. Thank you.
Giridhar Babu
(Querist) 21 December 2009
Thank You Mr. Durga Rao for your valuable opinion. It will help us out in planning the same.
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