Merger scheme/plan under the laws of India:

Companies Act, 1956: The relevant legal provisions regarding mergers of companies have been
dealt under Chapter 5 of the Companies Act, 1956. The legal provisions are Sections 391, 392,
393 and 394 which is providing the complete framework for executing a merger transaction.
Under this act once the merger scheme/plan has been proposed, by virtue of section 391 of the
Companies Act, 1956, an application is made to the Court. The court orders a meeting of
creditors, shareholders or members as the case maybe and in case there is an approval of more
than three-fourths of the members representing the shareholders, members or creditors, the court
shall approve of the merger scheme/plan. Under section 392 of the Companies Act, 1956 the
court has the power to supervise the merger scheme/plan and to pass relevant orders with respect
to the merger scheme/plan. Under section 393 of the Companies Act, 1956, a notice shall be
issued to all the creditors, members and shareholders which shall contain the terms of the merger
scheme/plan and stating the material interests of the directors, promoters and management.
Under section 394(4) of the Companies Act, 1956, merger between a foreign company with an
Indian company is possible but not of an Indian company merging with a foreign company where
the surviving entity is governed by the laws of the foreign companies state/territory by virtue of
section 2(10) and section 3 of the Companies Act, 1956. Thus after the merger the Indian
company should be the surviving entity which shall be governed by the Indian regulators.
Companies Act, 2013: The relevant legal provisions regarding mergers of companies have been
dealt under Chapter 15 of the Act. The relevant legal provisions are Sections 230-240 of the Act
which provides for the complete framework for executing a merger transaction. Contrary to the
provisions of the Companies Act, 1956, under the Companies Act 2013 both the transferor and
transferee company including a foreign company can merge with one another. This means that
the Indian Company can merge with the foreign company by virtue of section 234 of the
Companies Act, 2013 provided that the foreign company is incorporated in the jurisdictions of
the countries which are notified by the Central Government and the Central Government shall
make all rules and regulation for such merger schemes/plans.
Merger Scheme/plan under laws of Indiana:
Under the laws of the State of Indiana the merger provisions shall be governed by the Indiana
Code, Business Commercial laws, chapter 40 i.e. Merger And Share Exchange. Under section
23-1-40-7 of the Indiana Code states that the merger between the domestic company and foreign
company is possible if the merger is permitted by the laws of the state/territory where the foreign
company is incorporated. Thus this means that the merger between the Indian company and
Foreign company is possible with either of the companies can be the surviving entity.

Necessary Formalities and Documents

Under Companies Act, 1956 the formalities are as follows:

An application is made to the Court by the company, members, shareholders or creditors.

The court orders a meeting of creditors, shareholders or members as the case maybe and
in case there is an approval of more than three-fourths of the members representing the
shareholders, members or creditors, the court shall approve of the merger scheme/plan.

A notice shall be issued to all the creditors, members and shareholders which shall
contain the terms of the merger scheme/plan and stating the material interests of the
directors, promoters and management.
A certified copy of the order has to be filed with the Registrar of Companies.
A copy of every such order shall be annexed to every copy of the memorandum of the
company issued after the certified copy of the order has been filed with the Registrar of
Companies.