In order to merge, the Board of Directors of both companies are required to pass a special board resolution to alter the provisions of its Memorandum with respect to the objects of the company, so far as may be required to merge and acquire each other.
An application in the form of a petition then has to be filed before the court to confirm the proposed alteration.
A scheme of amalgamation has to be drawn up. Respective Board of Directors for both companies is required to approve the scheme of amalgamation. The parties will then have to fix a date for the merger to take place. Further arrangement has to be made to audit the companies’ account which is a non-statutory audit.
Then the parties must file a joint petition under section 228 of the Companies Act 1994 seeking courts permission in the form of amalgamation order to approve the merger arrangement and to dissolve the diminishing company without winding up.
If amalgamation order is given by the court regarding transfer of property or liabilities, that property shall be virtue of the order, be transferred to and vest in, and those liabilities shall be virtue of the order transferred to and become the liabilities of the Surviving entity.