SKP Business Alert
Volume 8 Issue 8 | 9 December 2016
MCA Notifies Corporate Restructuring Provisions 
 
Enforcing the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013, the Central Government (Ministry of Corporate Affairs) vide commencement notification dated 7 December 2016 has appointed 15 December 2016 as the date on which, inter alia, following provisions of the Companies Act, 2013 shall come into force: 
  • Section 48: Variation of shareholders’ rights
  • Section 66: Reduction of share capital
  • Section 230 (except sub-section (11) & (12)), sections 231 to 233, and sections 235 to 240: Compromise, arrangement and amalgamations
  • 434 (1) (c): All proceedings of Companies Act, 1956 with reference to compromise, arrangement, winding up, etc. pending with the High Court to be transferred to the National Company Law Tribunal (NCLT).
Also, vide rule 3 of Companies Amendment Rules (Transfer of Pending Proceedings), 2016, the Central Government has stated that all proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements and reconstruction (other than proceedings related to winding-up on the date the rule comes into force) shall stand transferred to the Benches of NCLT exercising respective territorial jurisdiction.

  

SKP's comments
With this notification, from 15 December 2016, corporate restructuring related matters including mergers, demergers, capital reductions, etc. will be filed before and dealt by NCLT exercising respective territorial jurisdiction. The Central Government has also notified rules for the transfer of certain pending proceedings before the respective High Courts to the concerned tribunal. It has been specifically clarified that proceedings in arbitration, compromise, arrangements and reconstruction which are reserved for orders for allowing or otherwise shall not be transferred. With this notification, now a substantial portion of the Companies Act, 2013, except few sections, stands notified. It is expected that rules relating to mergers and amalgamations will also be notified in the coming days as being a corollary to notification of section.

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