a. Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024
MCA has amended certain rules governing mergers under the companies law and amalgamations involving a foreign holding company and its wholly-owned Indian subsidiary will now require prior RBI approval. Amendments have been made to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The changes are with respect to "transferor foreign company incorporated outside India being a holding company and the transferee Indian company being a wholly-owned subsidiary company incorporated in India" entering into a merger. In such cases, both the companies shall obtain the prior approval of the Reserve Bank of India (RBI) and the transferee Indian company should also comply with the provisions of Section 233 under the Companies Act.
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b. Circular on Clarification on holding AGM/EGM through VC/OAVM
MCA recently released a circular clarifying that Companies whose AGM are due in 2024 or 2025 may conduct their AGMs through video conferencing (VC) or Other Audio Video Means (OAVM) on or before 30th September, 2025. However, this is not an extension of statutory time for holding AGMs by the Companies under the Companies Act, 2013. The same is also applicable for Extraordinary General Meetings (EGMs).
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c. Companies (Prospectus and Allotment of Securities) Amendment Rules, 2024
MCA has granted relief for “producer companies”, extending the compliance window on mandatory dematerialisation of their existing shares. Producer companies, who were earlier required to complete dematerialisation of their shares by September 30, 2024, have now been given time till end March 2028 to achieve full compliance.
In October last year, MCA had mandated that all private companies (other than small companies) will have to dematerialise existing shares by end September 2024. Also the private companies were mandated to issue new securities only in dematerialised form.
A “Producer Company” is a corporate entity designed for farmers and producers, primarily involved in agriculture and related activities. As a legal entity, they are recognised as a company under the Companies Act, facilitating more accessible credit, and better post-harvest management.
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