M&As in startup and MSME sectors will now be able to secure approval within 15 days that can go up to a maximum of 60 days, a corporate affairs ministry (MCA) notification said.
The move is seen as a big boost for the startup sector that has seen a rise in corporate restructuring in recent times.
The MCA has set an upper limit of 60 days for either approving the merger/amalgamation or placing its views before the adjudicating authority on any objections received. Failure to do so within the time limit will be considered a deemed approval.
As per the notification, if the MCA doesn’t receive any objection from the Registrar of Companies (RoC) and official liquidators within 30 days and if it’s in the interest of public or creditors of the companies, the ministry can confirm a merger or amalgamation within 15 days.
According to an official notification, the revised Companies (Compromises, Arrangements and Amalgamations) Rules will come into effect from June 15.
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Currently, there is no specified time frame for the approval from the RoC or official liquidators. Moreover, where the objections of the RoC and the official liquidators are found to be unsustainable and the government considers the merger or amalgamation to be in public interest, it may issue a confirmation order regarding the merger or amalgamation within 60 days.However, where the government finds the case to be not in public interest, it has to convey it to the National Company Law Tribunal (NCLT), stating its objections or suggestions in this regard.