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Haldiram Case: A Model for Corporate Restructuring
A compromise or arrangement under Sections 230–232 of the Companies Act, 2013 is a statutory mechanism that allows companies to reorganize their business by transferring parts of an undertaking, merging entities, or absorbing assets and liabilities. Courts approve the scheme, and once sanctioned, it becomes binding on all stakeholders. The recent NCLT Chandigarh Bench order…
Understanding Slump Sale vs Demerger: Key Tax Differences
A company can sell its assets and liabilities through slump sale. As per section 2(42C) of the Income Tax Act, “slump sale” means the transfer of one or more undertaking, by any means (“by any means” was substituted with “as result of sale” as per the Finance Act, 2021. In my opinion and understanding, it…
POSITION OF CREDITORS IN THE CASE OF DEMERGER AND SCOPE OF SECTION 230-232 OF THE COMPANIES ACT WRT TO CREDITORS
UNDERSTANDING THE “UNDERTAKING” As we all know that in the case of Demerger, company transfer’s its undertaking as going concern to the resulting company which can be a new company or existing company. Interestingly, “undertaking” has not been defined under this section but under the explanation to section 180 (1)(a) which says that undertaking means…
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