The Ministry of Corporate Affairs vide its notification dated 17th December 2020 has published the Companies (Compromises, Arrangements and Amalgamations) Second Amendment Rules, 2020 to further amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
Through this amendment a new definition for the term corporate action has been inserted which means “any action taken by the company relating to transfer of shares and all the benefits accruing on such shares namely, bonus shares, split, consolidation, fraction shares and right issue to the acquirer”.
Further a new rules 26A has been inserted which deals with Purchase of minority shareholding held in demat form in which the company shall within 2 weeks from the date of receipt of the amount equal to the price of shares to be acquired by the acquirer, verify the details of the minority shareholders holding shares in dematerialised form.
After verification, the company shall send notice to such minority shareholders by registered post or or by email about a cut-off date, which shall not be earlier than one month after the date of sending of the notice, on which the shares of minority shareholders shall be debited from their account and credited to the designated DEMAT account of the company, unless the shares are credited in the account of the acquirer, as specified in such notice, before the cut-off date.
After receiving the intimation of successful transfer of shares from the depository, the company shall immediately disburse the price of the shares so transferred, to each of the minority shareholders after deducting the applicable stamp duty, which shall be paid by the company, on behalf of the minority shareholders, in accordance with the provisions of the Indian Stamp Act, 1899.
Upon successful payment to the minority shareholders, the company shall inform the depository to transfer the shares of such shareholders, kept in the designated DEMAT account of the company, to the DEMAT account of the acquirer.
