COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS

Section 230: Power to Compromise or Make Arrangements with Creditors and

Members

1. Introduction:

 The section empowers the Tribunal to facilitate compromises or arrangements

between a company and its creditors or members.
 Application can be made by the company, any creditor, member, or the
liquidator in the case of a winding-up.

 It allows a company to enter into a compromise or arrangement with

its creditors or members or any class of them to restructure debts,
change share capital etc. This can be done through the National
Company Law Tribunal (NCLT).

2. Meeting Order:

 The Tribunal, upon application, can order a meeting of creditors or members,

directing its manner and conduct.
 Arrangement includes reorganization of share capital, specifying methods
such as consolidation or division.

3. Affidavit Disclosure (Subsection 2):

 The applicant must provide an affidavit disclosing material facts about the
company, including financial position, auditor's report, and ongoing
investigations.
 Specifics on the reduction of share capital and corporate debt restructuring, if
any, must be disclosed.

 The company or creditors or members can apply to NCLT to order a

meeting of creditors/members to consider the compromise or
arrangement. The applicant has to provide details of the company's
financial position, proposed reduction in share capital, any corporate
debt restructuring etc.
 

4. Meeting Notice and Disclosure (Subsections 3 and 4):

 Notice of the meeting must be sent individually to creditors, members, and

debenture-holders.
 Accompanied by a statement detailing the compromise or arrangement, a
valuation report, and its impact on various stakeholders.
 Published on the company's website and, for listed companies, submitted to
regulatory bodies and stock exchanges.

 Notice of meeting has to be sent to all creditors/members with

statement explaining details of compromise, valuation reports etc.
Notice also has to be sent to government, income tax authorities,
stock exchanges etc.

5. Voting and Objections (Subsection 4):

 Persons receiving notice may vote in person, through proxies, or by postal

ballot within one month.
 Objections can be raised by those holding at least ten percent shareholding or
having outstanding debt of at least five percent.

6. Notification to Authorities (Subsection 5):

 Authorities such as Central Government, income-tax authorities, RBI, SEBI,

stock exchanges, and others likely to be affected must be notified.
 They have thirty days to make representations; otherwise, their non-response
is presumed as no objections.

7. Binding Agreement (Subsection 6):

 If three-fourths majority of stakeholders agree, the compromise or

arrangement becomes binding.
 The Tribunal's order specifies matters like conversion of preference shares,
protection of creditors, variation of shareholders' rights, etc.

 Creditors/members holding at least 75% in value have to agree to the

compromise or arrangement. If agreed, NCLT can sanction it and it
will be binding on the company, members, creditors etc.
  NCLT order can provide for: conversion of preference shares to equity
shares, protection of any class of creditors, giving effect to variation
in shareholder rights under section 48, abatement of pending
proceedings before BIFR if creditors agree, exit offer to dissenting
shareholders etc.

8. Auditor's Certificate (Proviso in Subsection 7):

 No compromise or arrangement can be sanctioned without a certificate from

the company's auditor, confirming conformity with accounting standards.

 Auditor certificate confirming accounting treatment in scheme is as

per accounting standards is required.

 Provisions related to reduction of share capital and buyback under

the Act have to be complied with.

 The compromise/arrangement can also include takeover offers, which

for listed companies will be as per SEBI regulations.

9. Filing Order with Registrar (Subsection 8):

 The company must file the Tribunal's order with the Registrar within thirty
days of receipt.

10. Dispensation of Creditor Meeting (Subsection 9): - The Tribunal has the
authority to dispense with calling a meeting if at least ninety percent of creditors
agree through affidavit.

11. Buy-back and Takeover Provisions (Subsections 10 and 11): - Compromise or

arrangement involving buy-back of securities must comply with Section 68. -
Takeover offers are subject to SEBI regulations, especially for listed companies.

12. Grievances and Application to Tribunal (Subsection 12): - An aggrieved party

can approach the Tribunal for grievances regarding takeover offers.
13. Exemption from Section 66 (Explanation): - Clarifies that the reduction of
share capital, following the Tribunal's order under this section, is exempt from
Section 66 provisions.

A takeover offer is a corporate action in which a company, known as the acquirer, makes an
offer to purchase another company, referred to as the target 1. The acquiring company generally
offers cash, stock, or a combination of both for the target 1. The reasons behind takeover bid
offers can be synergy, tax benefits, or diversification 1.

There are generally four types of takeover bids:

1. Friendly: A friendly takeover bid takes place when both the acquirer and the target
companies work together to negotiate the terms of the deal 1.
2. Hostile: Rather than going through the board of directors of the target company, a
hostile bid involves going directly to the shareholders 1.
3. Reverse: In a reverse takeover bid, a private company becomes a public company by
purchasing control of the public company 1.
4. Backflips: A backflip takeover is a rare type of takeover in which the acquiring company
turns itself into a subsidiary of the purchased company 1.

These offers are normally taken to the target’s board of directors, and then to shareholders for
approval1. If approved,
A company can take several steps to reach a compromise with its creditors. Here are some of
them:
1. Negotiation: The company can negotiate with its creditors to reduce the total amount of
debt, decrease the interest rate, and increase the time to pay it back 12.
2. Debt Restructuring: This involves altering the terms of the debt agreement to make it
more manageable for the company12.
3. Conversion of Debt into Equity: In some cases, a portion of the company’s debt may be
converted into equity, giving the creditor a stake in the company 1.
4. Compromise & Arrangement under Companies Act, 2013: In India, Section 230 of the
Companies Act, 2013 provides a legal framework for a company to make a compromise
or arrangement with its creditors1. This can include a reorganization of the company’s
share capital by the consolidation of shares of different classes or by the division of
shares into shares of different classes1.
5. Corporate Debt Restructuring (CDR): This is a process that helps a company facing
financial difficulties to reduce its obligations to its creditors 1. The CDR process involves
the consent of not less than seventy-five per cent of the secured creditors in value 1.
6. Scheme of Arrangement: This is a court-approved agreement between a company and
its shareholders or creditors (e.g., a debt-for-equity swap). It may affect mergers and
amalgamations and may alter shareholder or creditor rights 1.

Section 231: Power of Tribunal to Enforce Compromise or Arrangement

1. Supervision and Directions (Subsection 1):

 Upon making an order under Section 230 sanctioning a compromise or

arrangement, the Tribunal is vested with specific powers:
  Supervision: It has the authority to supervise the implementation of
the approved compromise or arrangement.
 Directions: The Tribunal can give directions, either during the order or
at any subsequent time, regarding any matter related to the
compromise or arrangement. This includes the ability to make
modifications deemed necessary for proper implementation.

 Where the NCLT sanctions a compromise or arrangement between a

company and its creditors/members, it has the power to supervise
the implementation of such scheme.

 NCLT can give directions regarding any matter or make modifications

in the scheme at the time of sanctioning or anytime thereafter, as
necessary for proper implementation.

2. Winding Up in Case of Implementation Issues (Subsection 2):

 If the Tribunal determines that the sanctioned compromise or arrangement

cannot be implemented satisfactorily, with or without modifications, and the
company is unable to meet its debts as per the approved scheme:
 The Tribunal has the power to make an order for the winding up of the
company.
 Such an order for winding up is deemed to be made under Section 273.

 If NCLT is satisfied that the approved compromise/arrangement

cannot be implemented satisfactorily, with or without modifications,
and the company is unable to pay its debts as per the scheme, it may
order winding up of the company. Such order will be treated at par
with order passed under Section 273 (winding up by Tribunal).

3. Applicability to Previous Orders (Subsection 3):

 The provisions of this section are applicable, to the extent possible, to

companies for which an order sanctioning a compromise or arrangement was
made before the commencement of this Act.
 This ensures the retrospective application of the section to companies that
underwent the compromise or arrangement process before the enactment of
the relevant law
  Above provisions will also apply to a company for which
compromise/arrangement order was passed before commencement
of Companies Act, 2013.

Merger and Amalgamation of Companies (Section 232)

Tribunal's Power to Call Meeting (Section 232(1))

When an application is submitted to the Tribunal under section 230 for the approval
of a compromise or arrangement between a company and relevant stakeholders, the
Tribunal, under section 232(1), has the authority to order a meeting of creditors or
members. This applies specifically in the context of a scheme for the reconstruction
of the company or companies involving merger or amalgamation. The meeting may
be directed by the Tribunal, applying the provisions of sub-sections (3) to (6) of
section 230.

Circulation of Documents for Meeting (Section 232(2))

Upon the Tribunal's order, merging companies or those involved in the proposed
division must circulate various documents for the ordered meeting. These documents
include:

 Draft of the proposed scheme's terms.

 Confirmation of filing the draft scheme with the Registrar.
 Report by directors explaining the compromise's effects on different classes of
stakeholders.
 Expert valuation report, if applicable.
 Supplementary accounting statement, if last annual accounts are more than
six months old.

Sanctioning of Scheme by Tribunal (Section 232(3))

Once the Tribunal ensures compliance with the specified procedures, it can, by order,
sanction the compromise or arrangement. The Tribunal may make provisions for
several matters, including:

 Transfer of undertaking, property, or liabilities to the transferee company.

 Allotment or appropriation of shares, debentures, etc., by the transferee
company.
 Continuation of legal proceedings by or against the transferee company.
 Dissolution of the transferor company without winding-up.
  Provision for dissenting parties.
 Specific provisions for listed and unlisted companies.

Auditor's Certificate and Transfer of Property or Liabilities (Sections 232(4) and (8))

 No compromise or arrangement can be sanctioned without the company's

auditor certifying conformity with accounting standards (section 232(8)).
 If an order provides for the transfer of property or liabilities, the property is
transferred to the transferee company, and liabilities become its responsibility.

Filing with Registrar and Effective Date of Scheme (Sections 232(5) and (6))

 Every company involved must file a certified copy of the order with the
Registrar within 30 days.
 The scheme must clearly indicate an appointed date from which it becomes
effective.

Annual Statement and Penalties (Sections 232(7) and (8))

 Companies must file an annual statement certified by a professional until the

scheme's completion.
 Penalties, including fines and imprisonment, are imposed for contraventions.

Rule 15.31: Compromise or Arrangement Includes 'Demerger'

Rule 15.31 explains that, for the purpose of Chapter XV of the Act, 'demerger' in
relation to companies involves the transfer of one or more undertakings by a
'demerged company' to a 'resulting company' under a scheme of arrangement.
Accounting treatment is specified until Accounting Standards are prescribed for
demergers.

Combined Explanation

In summary, Section 232 outlines the legal processes for mergers and
amalgamations, from the Tribunal's power to call meetings and circulation of
relevant documents to the sanctioning of schemes, auditor's certification, property or
liabilities transfer, filing with the Registrar, and annual compliance. Rule 15.31
provides clarity on the inclusion of 'demerger' within the scope of compromises or
arrangements, detailing the accounting treatment until specific standards are
established.

A merger and an amalgamation are both methods of consolidation in corporate

structures, but they have subtle differences 123:
  Merger: This refers to the combination of two or more companies into a
single entity. One of the companies typically survives as the legal entity,
absorbing the other companies13. The companies that are absorbed cease to
exist, and their assets and liabilities become part of the surviving
company1. Mergers are often done to expand a company’s reach, expand into
new segments, or gain market share in an effort to create shareholder value 1.

 Amalgamation: This is a process where two or more companies combine to

form an entirely new entity12. None of the original companies survive as legal
entities. Instead, a completely new entity is formed, taking on the combined
assets and liabilities of the former companies 2. Amalgamations are often done
to reduce operational costs due to functional synergy, increase cash resources,
reduce competition, and save on taxes 2.

PROCEDURE OF MERGER AND AMALGATION THROUGH TRIBUNAL

A merger is a corporate strategy of combining different companies into a single
company in order to enhance the financial and operational strengths of both
organizations1. It involves the combination of two or more entities into one,
where one or more existing companies merge their identity into another to
form a new and different entity1.
The procedure for a merger through a tribunal, specifically the National
Company Law Tribunal (NCLT) in India, under the Companies Act 2013
(Sections 230, 231, and 232) and the Companies (Compromises, Arrangements,
and Amalgamations) Rules, 2016, is as follows12:
1. Board Meeting: Hold a board meeting of both the transferor and
transferee company to pass a resolution to amalgamate with another
company and consider the draft of the Scheme of Merger 1.
2. Application to Tribunal: Both the transferor and transferee company
shall make an application in the form of a petition to the Tribunal for the
necessity to approve the scheme of the merger3. This application is
submitted in Form No. NCLT-1 along with a notice of admission in Form
No. NCLT-2, an affidavit in Form No. NCLT-6, and a copy of the scheme of
compromise or arrangement1.
 3. Meeting of Creditors and Shareholders: The Tribunal may order a
meeting of the creditors or class of creditors, or of the members or class
of members, to be called, held, and conducted in such manner as the
Tribunal directs1.
4. Approval of Merger Proposal: Shareholders and creditors are given the
option to cast their vote through postal ballot4. If the merger proposal is
approved by the respective shareholders and creditors, the companies
can follow the further procedures as per sections 230 to 234 of the
Companies Act, 20132.

Overview of Fast Track Mergers (Section 233)

1. Eligibility Criteria for Fast Track Mergers

 Fast track mergers, as per Section 233, are applicable to:

 Two or more small companies
 Merger between a holding company and its wholly-owned subsidiary
 Other classes of companies as may be prescribed

2. Definitions:

 Holding Company (Section 2(46)): A company of which other companies are subsidiary
companies.
 Small Company (Section 2(85)): A non-public company with either:
 Paid-up share capital not exceeding fifty lakh rupees (or a higher prescribed
amount up to five crore rupees)
 Turnover not exceeding two crore rupees (or a higher prescribed amount up to
twenty crore rupees)
 Exceptions: Excludes holding companies, Section 8 companies, or those governed
by any special Act.

3. Subsidiary Company (Section 2(87)):

 A company in which the holding company controls the composition of the Board of
Directors or exercises/control more than one-half of the total share capital.

4. Merger Process (Section 233(1)):

 Notice and Objections:

 The transferor company issues a notice inviting objections or suggestions from
the Registrar, Official Liquidators, or affected parties within thirty days.
 Approval Requirements:
 Objections and suggestions are considered in general meetings, and the scheme
must be approved by at least ninety percent of the total shares.
 Declaration of Solvency:
  Each involved company files a declaration of solvency with the Registrar.

5. Rule 15.25 - Detailed Procedures:

 Wholly Owned Subsidiary:

 A company is deemed a wholly owned subsidiary if the holding company holds a
hundred percent share capital.
 Exclusions: Shares held by nominees to maintain the statutory limit.

6. Transferee Company's Responsibilities (Section 233(2)):

 Filing of Scheme:
 The transferee company files the approved scheme with the Central Government,
Registrar, and Official Liquidator within seven days after the meetings.
 Fees are paid through the MCA e-filing system.

7. Central Government Confirmation (Section 233(3)):

 Registration and Confirmation:

 If no objections or if objections are resolved, the Central Government registers
the scheme and issues confirmation.
 Confirmation order is filed with Registrars through Form 15.14.

8. Objections and Application to Tribunal (Sections 233(4) and (5)):

 Communication of Objections:
 If the Registrar or Official Liquidator has objections, they communicate within
thirty days; otherwise, it's presumed no objection.
 Central Government's Role:
 If objections persist, the Central Government may file an application before the
Tribunal within sixty days, stating objections.

9. Tribunal's Action (Section 233(6)):

 The Tribunal may direct consideration under Section 232 or confirm the scheme based on
reasons recorded in writing.
 If no objection from the Central Government, it is deemed to have no objection.

10. Registrar Communication and Effects of Registration (Sections 233(7) and (8)):

 The order confirming the scheme is communicated to the Registrar of the transferee
company.
 Registration leads to the dissolution of the transferor company without winding-up.

11. Effects of Registration (Section 233(9)):

 Transfer of Property/Liabilities:
  Property/liabilities of the transferor become those of the transferee.
 Enforceability of Charges:
 Charges on transferor's property apply to the transferee.
 Continuation of Legal Proceedings:
 Legal proceedings continue against or by the transferee.
 Dissenting Shareholders/Creditors:
 Unpaid amounts due to dissenting shareholders/creditors become the liability of
the transferee.

12. Restrictions on Transferee Company (Section 233(10)):

 Transferee company cannot hold any shares in its own name or trust after the merger;
such shares are canceled or extinguished.

13. Transferee Company's Application to Registrar (Section 233(11)):

 The transferee company files an application with the Registrar, indicating the revised
authorized capital and paying prescribed fees.
 Fees paid by the transferor company may be set off against the fees payable by the
transferee company.

This comprehensive overview highlights the detailed process of fast track mergers under Section
233, addressing eligibility, definitions, procedural steps, and the legal implications of the merger.
If you have any specific questions or need further clarification on any part, please feel free to ask.

Certainly, Rehan sir. Let's continue with the detailed explanation of the remaining sections and
rules related to the fast-track merger process under Section 233.

14. Application of Section 233(12):

 The provisions of Section 233(12) apply mutatis mutandis to companies specified in

subsection (1) in respect of a scheme of compromise or arrangement referred to in
Section 230 or division or transfer of a company referred to in clause (b) of subsection (1)
of Section 232.

15. Central Government's Authority (Section 233(13)):

 The Central Government may provide for the merger or amalgamation of companies in
such manner as may be prescribed.

16. Use of Section 232 (Section 233(14)):

 A company covered under this section may use the provisions of Section 232 for the
approval of any scheme for merger or amalgamation.

Conclusion:
In conclusion, Section 233 outlines a simplified and expedited process for mergers or
amalgamations involving small companies, holding companies, and their wholly-owned
subsidiaries. The process involves detailed steps, from issuing notices to objections, approvals,
and regulatory filings. The Central Government's role is crucial, ensuring the scheme aligns with
public interest and creditors' interests. The registration of the scheme brings about legal
implications, including the transfer of property and liabilities, continuation of legal proceedings,
and handling dissenting shareholders or creditors.

A Fast Track Merger is a provision under Section 233 of the Companies Act,
2013, that allows certain classes of companies to undergo a merger process
with a simplified and expedited timeline1234. It aims to reduce procedural
complexities, save costs, and ensure that the merger is completed within a
specified deadline34.
Fast Track Merger can be entered between the following types of companies 1:
1. Holding Company and its wholly owned subsidiary company
2. Merger between two or more small companies
3. Such Other class or classes of companies as may be prescribed
The benefits of a Fast Track Merger include12:
1. No mandatory approval of NCLT required
2. No need of issuing public advertisement
3. No court convened meeting
4. Less administrative burden
5. Series of hearings may be avoided
6. Registration of scheme shall deemed to have effect of dissolution of
transferor companies without the process of winding up
7. Comparatively less cost
The procedure for a Fast Track Merger includes drafting of the scheme of
merger, approval from shareholders, creditors, Registrar of Companies, Official
Liquidator, and Regional Director1
Procedure
Fast Track Merger is a simplified procedure for mergers and amalgamations of
certain classes of companies, including small companies, holding and
subsidiary companies12. Here is the step-by-step procedure for a Fast Track
Merger:
1. Authorisation in the Articles of Association: The Articles of Association of
both the transferor and transferee company should authorize the
merger. If not, the Articles of Association need to be altered first2.
2. Approval of the Board for the Merger Scheme: Both the transferor and
transferee company need to prepare the draft scheme for Merger and
the same should be approved by the members of the Board2.
3. Filing the Draft Scheme: The scheme must be filed with the Jurisdictional
Registrar of Companies (ROC) as well as the official liquidator1.
4. Declaration of Solvency: A Declaration of Solvency needs to be filed with
the ROC3.
5. Meeting of Members and Creditors: Convene a meeting of members and
creditors to obtain approval13.
6. Filing the Scheme with ROC: After the scheme is approved by the
members and creditors, it needs to be filed with the ROC 1.

I. Introduction:

The provided legal text pertains to Section 234 of the Companies Act, addressing the
merger or amalgamation of a company with a foreign company. This section outlines
the applicability of certain provisions and the regulatory framework for such
transactions involving companies registered under the Act and those incorporated in
foreign jurisdictions.

II. Applicability of Chapter:

The text begins by stating that the provisions of this Chapter (presumably referring
to the chapter in the Companies Act that includes Section 234) will apply mutatis
mutandis to schemes of mergers and amalgamations. This application is extended to
companies registered under the Companies Act and companies incorporated in
foreign countries specified by the Central Government.

Explanation:

 Mutatis Mutandis: This Latin phrase means "with necessary changes." In the
legal context, it signifies the application of the same rules but with
modifications as necessary.

III. Central Government's Role:

The Central Government is granted the authority to notify specific countries whose
companies are eligible for merger or amalgamation with Indian companies.
Additionally, it holds the power to establish rules, in consultation with the Reserve
Bank of India (RBI), concerning mergers and amalgamations under this section.

Explanation:

 Proviso Clause: The statement provides a condition or exception to the

preceding statements. In this context, it specifies that rules may be made by
the Central Government in collaboration with the RBI.

IV. Foreign Company Merger:

The second subsection outlines the process by which a foreign company may merge
into a company registered under the Companies Act and vice versa. It emphasizes
the need for prior approval from the Reserve Bank of India.

Explanation:
  Prior Approval: Before a foreign company engages in a merger with an
Indian company or vice versa, it must obtain approval from the Reserve Bank
of India.

V. Terms and Conditions of Merger:

The terms and conditions of the merger or amalgamation are flexible and may
include various arrangements. One such arrangement is the payment of
consideration to the shareholders of the merging company. This consideration can
be in cash, in the form of Depository Receipts, or a combination of both, as outlined
in the scheme devised for this purpose.

Explanation:

 Consideration to Shareholders: Shareholders of the company undergoing

merger are entitled to receive payment, and the modes of payment are
diverse, including cash or Depository Receipts.

VI. Definition of Foreign Company:

The Explanation section clarifies that a "foreign company" encompasses any

company or body corporate incorporated outside India, whether or not it has a place
of business within India.

Explanation:

 Foreign Company Definition: The term "foreign company" encompasses

entities incorporated outside India, regardless of whether they have a business
presence in India.
In conclusion, Section 234 establishes a regulatory framework for mergers and
amalgamations involving Indian companies and foreign entities. It emphasizes the
role of the Central Government and RBI in governing such transactions while
providing flexibility in the terms and conditions of mergers. The careful consideration
of shareholder interests and the definition of a foreign company are pivotal aspects
of this legal provision.

7. I. Approval of Scheme or Contract:

8. This section allows a company taking over another company to acquire shares
from dissenting shareholders if a scheme or contract is approved by the
majority of shareholders, specifically at least nine-tenths in value, within four
months after the takeover offer.
9.

10. II. Notice to Dissenting Shareholders:

11. If the scheme is approved, the acquiring company has the right to give notice
within two months to any shareholder who disagrees with the deal, expressing
its intention to buy their shares.
12.

13. III. Acquisition Process:

14. The acquiring company is then obligated to acquire the dissenting
shareholder's shares, unless the Tribunal intervenes within one month of the
notice.
15.

16. IV. Obligations of Companies:

17. If no Tribunal intervention occurs, the acquiring company must inform the old
company, transfer the shares, and pay the agreed-upon price. The old
company then registers the new company as the owner of those shares.
18.

19. V. Handling of Consideration:

 20. Any money received by the old company is held in trust and must be paid to
entitled shareholders within sixty days.
21.

22. VI. Modification for Pre-existing Offers:

23. For takeover offers made before the Act started, there are specific changes in
language, ensuring a smooth transition in the process.
24.

25. In essence, Section 235 ensures a fair process when a company acquires
another, especially regarding dissenting shareholders, with oversight from the
Tribunal when needed.

I. Majority Acquisition Notification:

This section deals with the situation where an acquirer or a group of people, by virtue
of activities like amalgamation or share exchange, holds 90% or more of a company's
issued equity share capital. In such a scenario, they must notify the company of their
intention to buy the remaining equity shares.

II. Offer to Minority Shareholders:

Following the notification, the acquirer or group must offer to buy the equity shares
held by minority shareholders. The price for these shares is determined through a
valuation by a registered valuer, adhering to prescribed rules.

III. Minority Shareholder's Option:

The minority shareholders, in turn, have the option to offer to buy the majority
shareholders' shares at a price determined by the same rules.

IV. Handling of Funds:

The majority shareholders, as part of the purchase process, deposit an amount equal
to the value of the shares to be acquired in a separate bank account. This amount is
used for disbursement to minority shareholders within sixty days.

V. Role of Transferor Company:

The company from which shares are being acquired (transferor company) acts as a
transfer agent, managing the payment to minority shareholders and facilitating the
transfer of shares.

VI. Non-Delivery of Shares:

If minority shareholders don't physically deliver their shares within the specified time,
the share certificates are considered canceled. The transferor company then issues
new shares and completes the transfer, using the funds deposited by the majority.
VII. Continuing Rights of Minority Shareholders:

If majority shareholders purchase shares of deceased or non-existing minority

shareholders, the remaining minority shareholders can still offer their shares for sale
for three years from the date of majority acquisition.

VIII. Additional Compensation Sharing:

If, after the acquisition, the majority shareholders negotiate a higher price for any
transfer without disclosing it, they must share the additional compensation with
minority shareholders on a pro-rata basis.

IX. Definitions:

The section provides definitions for terms like "acquirer" and "person acting in
concert," referring to the meanings assigned in the Securities and Exchange Board of
India (SEBI) regulations.

X. Continued Application:

Even if shares are delisted or a specified time elapses, the provisions of this section
continue to apply to residual minority equity shareholders if full purchase isn't
achieved.