Specimen Agreement for Amalgamation of Two Companies — Format 2026

Amalgamation Agreement — Overview

An amalgamation agreement is the definitive agreement between two or more companies agreeing to merge/amalgamate under Sections 230-232 of the Companies Act, 2013. The agreement outlines: (a) the scheme of amalgamation, (b) the share exchange (swap) ratio, (c) the effective date, (d) treatment of employees, assets, and liabilities, (e) conditions precedent, and (f) the procedure for obtaining NCLT approval. The scheme must be approved by: (a) the Board of each company, (b) members holding 3/4th value (Special majority at a court-convened meeting), (c) creditors (if their rights are affected), and (d) NCLT.

Specimen Agreement — Key Clauses

[Illustrative format]

SCHEME OF AMALGAMATION of [Transferor Company Name] ("Transferor") WITH [Transferee Company Name] ("Transferee")

BETWEEN: [Transferor Company], CIN: [Number] AND [Transferee Company], CIN: [Number]

1. Definitions

"Appointed Date" means [Date — the date from which the scheme is deemed effective for accounting purposes]. "Effective Date" means the date on which certified copies of NCLT orders are filed with the ROC. "Undertaking" means the entire business of the Transferor including all assets, liabilities, properties, rights, and obligations.

2. Transfer of Undertaking

With effect from the Appointed Date: the entire undertaking of the Transferor shall stand transferred to and vested in the Transferee as a going concern — including all assets (movable and immovable), liabilities, contracts, licenses, permits, IP, goodwill, employees, and records.

3. Share Exchange Ratio

The shareholders of the Transferor shall receive [X] equity shares of the Transferee for every [Y] equity shares held in the Transferor (the "Swap Ratio"). The swap ratio has been determined based on the valuation report of [Registered Valuer Name], dated [Date]. Fractional entitlements shall be: (a) rounded up to the nearest whole share, OR (b) paid in cash at the Transferee's share price.

4. Treatment of Employees

All employees of the Transferor shall become employees of the Transferee with effect from the Effective Date — on terms not less favorable than their existing terms. Continuity of service shall be recognized. All employee benefits (gratuity, PF, leave, ESOP) shall be honored by the Transferee.

5. Conditions Precedent

(a) Approval by the Board of Directors of both companies, (b) approval by 3/4th majority of members of each company at court-convened meetings, (c) approval by creditors (if required), (d) NCLT approval under Section 232, (e) CCI approval (if applicable — Competition Act thresholds), (f) SEBI/stock exchange approval (if listed), (g) RBI/FEMA approval (if foreign shareholders), (h) any other regulatory approval.

6. Dissolution

Upon the scheme becoming effective: the Transferor Company shall stand dissolved WITHOUT winding up — no liquidation proceedings required.

7. Accounting Treatment

The amalgamation shall be accounted for by the Transferee using the [Pooling of Interest Method / Purchase Method] as per Ind AS 103 (Business Combinations). All assets and liabilities shall be recorded at [book value / fair value].

NCLT Procedure — Section 230-232

Step 1: Board approval of both companies. Step 2: File application with NCLT for directions to convene meetings of members and creditors. Step 3: NCLT directs meetings — notice to members/creditors (21 days) with scheme documents. Step 4: Meetings — approval by 3/4th value majority of members present and voting + majority in number. Step 5: Petition to NCLT for sanctioning the scheme — attach: meeting results, valuation report, auditor certificate, no-objection from ROC/Income Tax. Step 6: NCLT hearing — examines fairness, legality, and compliance. Step 7: NCLT Order sanctioning the scheme. Step 8: File certified copy of NCLT order with ROC of both companies — within 30 days. The scheme becomes effective on filing.

Fast-Track Merger — Section 233

For small companies and holding-subsidiary mergers: Section 233 provides a simplified (non-NCLT) route. The scheme is approved by: members (90% majority in value), creditors, and filed with the Regional Director (not NCLT). MCA Amendment (September 2025) widened the scope of fast-track mergers — more companies now qualify. This route is faster (3-4 months vs 6-12 months for NCLT route) and less expensive.

Tax Implications

(a) Section 47(vi)-(vii): Transfer of assets in amalgamation is NOT a transfer for capital gains purposes — NO capital gains tax (subject to conditions: all assets and liabilities transferred, shareholders receive shares in the transferee). (b) Section 72A: Accumulated losses and unabsorbed depreciation of the transferor can be carried forward by the transferee (subject to conditions). (c) GST: Transfer of business as a going concern in amalgamation is EXEMPT from GST. (d) Stamp Duty: State-specific — many states provide exemptions or reduced stamp duty for court-approved amalgamations.