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MCA Notification No. GSR.79(E) Dated 03/02/2020 – Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2020.

MCA Vide Notification No. GSR.79(E) on 03/02/2020 issued The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2020 to further amend Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 which has come into force with the following amendment:

  • After Rule 3(4) the following sub-rule is inserted –
  • (5) A member of the company shall make an application for arrangement, for the purpose of takeover offer in terms of sub-section (11) of section 230, when such member along with any other member holds not less than three-fourths of the shares in the company, and such application has been filed for acquiring any part of the remaining shares of the company.

Explanation 1 – “shares” means the equity shares of the company carrying voting rights, and includes any securities, such as depository receipts, which entitles the holder thereof to exercise voting rights.

Explanation 2 – Nothing in this sub-rule shall apply to any transfer or transmission of shares through a contract, arrangement or succession, as the case may be, or any transfer made in pursuance of any statutory or regulatory requirement.

  • (6) An application of arrangement for takeover offer shall contain:

(a) The report of a registered valuer disclosing the details of the valuation of the shares proposed to be acquired by the member after taking into account the following factors: –

(i) The highest price paid by any person or group of persons for acquisition of shares during last twelve months;

(ii) The fair price of shares of the company to be determined by the registered valuer after taking into account valuation parameters including return on net worth, book value of shares, earning per share, price earning multiple vis-d-vis the industry average, and such other parameters as are customary for valuation of shares of such companies.

(b) Details of a bank account, to be opened separately, by the member wherein a sum of amount not Iess than one-half of total consideration of the takeover offer is deposited.”

  • The following addition is made to the Schedule of Fees –


Sub-section (1) of section 230


Application for compromise,  arrangement and  amalgamation

Rs. 5000

The said Notification can be accessed through the following link:MCANotif_GSR.79(E)_03022020_Co.(Compromise,Arrangement,Amalgamation)Amendment Rules 2020

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