Comments on the IBBI Discussion Paper on ‘Streamlining Processes under the Code: Reforms for Enhanced Efficiency and Outcomes’

– Resolution Team, Vinod Kothari and Company | resolution@vinodkothari.com

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Group Insolvency: Relevance of Substantive Consolidation in Indian Context

Interim Finance becomes effective and attractive

Navigating the Complexity of ‘Contingent Claims’ in IBC: a call for clarity

Budget 2025: Mergers not to be used for evergreening of losses

– Barsha Dikshit and Neha Malu | resolution@vinodkothari.com

The provisions related to the carry forward and set-off of business losses in the context of corporate restructuring have been a critical aspect of corporate taxation. The Budget 2025[1] proposes certain amendments concerning carry forward of losses in cases of amalgamation, pursuant to which mergers shall not be used for evergreening of losses. That is to say, the benefit of carry forward shall be limited to eight years from the onset of losses, and not eight years from the merger.

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Fast Track Merger- finally on a faster track

– Barsha Dikshit, Partner | resolution@vinodkothari.com

The objective of promoting ‘ease of doing business in India’ had made the Ministries introduce some really momentous concepts and corresponding changes in law. One of such moves taken by the Ministry of Corporate affairs (‘MCA’), was introduction of section 233 of the Companies Act, 2013 (‘Act’) dealing with “Merger and amalgamation of certain types of companies” vide notification dated 7th December, 2016, [1] thereby offering an alternative mode to certain classes of companies for entering into scheme of merger or amalgamation. The idea was to process the scheme of arrangements involving wholly owned subsidiaries or small companies in a cost effective and comparatively swift way. However, upon the practical implementation of the provision, it was seen that the time taken by the authorities for disposal of such applications and issuing confirmation orders to the schemes was longer than expected and therefore, the provision was losing its relevance.

It is in the backdrop of such delays, MCA, vide notification dated 15th May, 2023 (yet to be published in e-gazette) has introduced certain amendments in the Companies (Compromise, Arrangements, and Amalgamations) Rules, 2015 (‘CAA Rules’) ensuring faster disposal of applications u/s 233 of the Act. The amendments shall be effective w.e.f. 15th June, 2023.

This article intends to discuss the amendments introduced by MCA and to gauge the effectiveness of the same.

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Analysing Current Issues in Liquidation under IBC & Future Reforms

– Sikha Bansal & Barsha Dikshit, Partner | resolution@vinodkothari.com

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SEBI Circular | Operational guideline on Scheme of arrangement for entities having listed NCDs/ NCRPS

– Kaushal Shah, Executive | kaushal@vinodkothari.com

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Read our related resources on the recent 6th LODR amendments :

  1. SEBI rationalizes ID appointment and removal process for first term Re-appointment process to be rationalized post amendment in CA, 2013
  2. SEBI LODR amendments: Minority say in independent directors, added regulations for debt issuers
  3. SEBI notifies amendments in LODR for NCS entities Scheme of Arrangement | Submission of financial results & line items | Transfer to IPEF for unclaimed NCS amounts by body corporate

SEBI notifies amendments in LODR for NCS entities Scheme of Arrangement | Submission of financial results & line items | Transfer to IPEF for unclaimed NCS amounts by body corporate

Ajay Ramanathan, Executive |

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Read our related resources :

  1. SEBI LODR amendments: Minority say in independent directors, added regulations for debt issuersSEBI rationalizes ID appointment and removal process for first term Re-appointment process to be rationalized post amendment in CA, 2013
  2. SEBI rationalizes ID appointment and removal process for first term Re-appointment process to be rationalized post amendment in CA, 2013

FAQs on minority squeeze-out : Section 236 of the Companies Act, 2013

Last updated – 4th January, 2022

Relevant article on the subject can be read here – https://vinodkothari.com/2017/01/minority-squeeze-out-a-strong-new-provision-under-section-236-of-the-companies-act-2013/

Attributes of a Resolution Plan

Attributes of a Resolution Plan

Other ‘I am the best’ presentations can be viewed here

Our other resources on related topics –

  1. https://vinodkothari.com/2020/09/arcs-and-insolvency-resolution-plans/
  2. https://vinodkothari.com/2018/03/resolution-plans-to-subsume-statutory-dues/

An Odd Scheme: Case for exclusion of schemes of arrangement from scheme of liquidation

Sikha Bansal, Partner

[resolution@vinodkothari.com]

The Article below has also been published on the IndiaCorplaw Blog, see here 

The concerns around section 230 schemes in the background of insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) have been partly addressed with the ruling of Supreme Court (SC) in Arun Kumar Jagatramka v. Jindal Steel and Power Ltd. The SC has held that the prohibition contained in section 29A should also attach itself to a scheme of compromise or arrangement under section 230 of the Companies Act, when the company is undergoing liquidation under the auspices of IBC. Reason being: proposing a scheme of compromise or arrangement under section 230 of the Companies Act, while the company is undergoing liquidation under the provisions of the IBC, lies in a similar continuum.

Earlier, there were several rulings of NCLAT which allowed schemes of arrangement during liquidation – for instance, see S.C. Sekaran, Y. Shivram Prasad, etc. After such rulings, the IBBI (Liquidation Process) Regulations were amended to include Regulation 2B, which also state that “a person, who is not eligible under the Code to submit a resolution plan for insolvency resolution of the corporate debtor, shall not be a party in any manner to such compromise or arrangement.” Read more

Corporate Restructuring- Corporate Law, Accounting and Tax Perspective

Resolution Division 

(resolution@vinodkothari.com)

Restructuring is the process of redesigning one or more aspects of a company, and is considered as a key driver of corporate existence. Depending upon the ultimate objective, a company may choose to restructure by several modes, viz. mergers, de-mergers, buy-backs and/ or other forms of internal reorganisation, or a combination of two or more such methods.

However, while drafting a restructuring plan, it is important to take into consideration several aspects viz. requirements under the Companies Act, SEBI Regulations, Competition Act, Stamp duty implications, Accounting methods (AS/ Ind-AS), and last but not the least, taxation provisions.

In this presentation, we bring to you a compilation of the various modes of restructuring and the applicable corporate law provisions, accounting standards and taxation provisions.

http://vinodkothari.com/wp-content/uploads/2020/11/Corprorate-Restructuring-Corporate-Law-Accounting-Taxation-Perspective.pdf