CS Executive Company Law cheat sheet

Compromise, Arrangement, Amalgamation and Winding Up

• Compromise/arrangement (Sec 230): application to NCLT by the company, creditor or member; NCLT orders a meeting of creditors or members by 75% in value of those present and voting.

• Section 231: NCLT order sanctioning the scheme is binding on the company, its members, creditors, and the liquidator; copy filed with ROC within 30 days.

• Section 232: merger/amalgamation scheme requires approval of members and creditors and NCLT sanction; dissenting members may be bought out; the order provides for transfer of assets and liabilities.

• Fast-track merger (Sec 233): for small companies, holding-subsidiary and startups, with approval of members and creditors and ROC/regional director instead of NCLT.

• Winding up grounds (Sec 271): inability to pay debts, special resolution, failure to commence business within a year, and just and equitable grounds.

• Sec 272: petition by company, creditor, contributory, or the Registrar; Sec 273: NCLT may appoint a provisional liquidator.

• Voluntary winding up (Sec 304): members' voluntary winding up requires a declaration of solvency; creditors' voluntary winding up where the company is insolvent.

• IBC 2016 prevails over winding-up provisions: where insolvency proceedings are initiated, the NCLT admits the application under Sec 7/9/10 of the Code and the moratorium applies.