Template Description

The Scheme of Merger / Amalgamation Template is a comprehensive legal document drafted by Sections 230 to 232 of the Companies Act, 2013. It is designed to facilitate the legal unification of two or more companies into a single entity through a court-approved arrangement. This 4-page MS Word template enables companies to present a legally compliant, tax-efficient, and procedurally sound merger scheme before the National Company Law Tribunal (NCLT).

It is ideal for private and public limited companies, including unlisted or listed companies, that are engaging in corporate restructuring, consolidation, or group simplification. The template also includes a pre-merger audit checklist and an illustrative timeline of activities to streamline implementation.

Understanding the Scheme of Merger / Amalgamation Template

This Scheme provides a step-by-step legal and procedural framework for amalgamating two or more companies, ensuring transparency, legal compliance, and business continuity for the merging entities, their stakeholders, and regulators. It covers structural, financial, tax, legal, HR, and regulatory aspects of the merger.

Key Features of the Template

1. Legal Basis and Format Compliance: Drafted by Sections 230–232 of the Companies Act, 2013, Aligned with rules framed by the NCLT, ROC, SEBI, and Income Tax Act, Covers all statutory components
2. Detailed Company Background Section: Captures the history, nature of business, CIN, and business operations of both the Transferor and Transferee companies
3. Amalgamation Structure & Terms: Transfer and vesting of all assets, liabilities, contracts, and employees of the Transferor into the Transferee, including Share Exchange Ratio, Covers board composition, post-merger integration, and issue of shares
4. Rationale and Strategic Objectives: Justifies the need for the merger, including cost savings, tax optimisation, elimination of duplication, and operational synergies
5. Legal Proceedings, Employee & IP Transition: Transfer of legal proceedings, contracts, employees, permits, licenses seamlessly, Ensures continuity of employment and IP rights protection
6. Accounting Treatment & Tax Neutrality: Covers treatment under IND-AS 103 or AS 14, Ensures compliance with Section 2(1B) of the Income Tax Act for tax neutrality
7. Timeline for Merger Activities: Includes a detailed activity chart from board approval to NCLT sanction, share allotment, and ROC filings, with suggested timeframes
8. Pre-Merger Audit Checklist: A structured checklist covering legal, financial, operational, compliance, environmental, and HR audits, ensuring due diligence is completed before filing the scheme
9. Conditions Precedent & Representations: Lists all approvals required, includes mutual representations and warranties by both companies

Conclusion

The Scheme of Merger / Amalgamation Template is a powerful legal and corporate governance tool that provides clarity, compliance, and operational efficiency to organisations pursuing mergers. By offering a structured roadmap for planning, drafting, and implementing a merger, this template ensures alignment with legal standards, shareholder interests, and regulatory expectations. The inclusion of audit checklists and execution timelines makes it not only a legal document but also a project management aid for seamless merger execution.