Merger & Amalgamation Structuring: After Approval: What Continues
Merger & Amalgamation Structuring does not end at approval — a set of obligations continues afterwards. The questions below are the ones raised most often in practice; the full scope of the service is on the Merger & Amalgamation Structuring page.
What is a Fast Track Merger and when can we use it?
A Fast Track Merger under Section 233 of the Companies Act 2013 (read with Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules 2016) is a simplified merger route available only to prescribed classes of companies. These were traditionally small companies, start-ups, and a holding company merging with its wholly-owned subsidiary; amendments effective 4 September 2025 widened the list to include, among others, certain unlisted companies within a prescribed borrowing limit and with no repayment default, holding-subsidiary mergers where the transferor is unlisted, mergers of unlisted fellow subsidiaries of the same holding company, and demergers. Confirm current eligibility against the latest rules before choosing the route. Instead of an NCLT hearing, the scheme is approved by the Regional Director based on a paper record, after inviting objections from RoC, Official Liquidator, and creditors. It is materially faster and less expensive than a full Sections 230–232 scheme.
In practice: We check Fast Track eligibility as a first question in every group-simplification engagement — particularly since the 2025 widening, a group that qualifies for this route (typically holding-subsidiary absorptions) should not default to the longer, more expensive full NCLT scheme without checking.
What happens to the transferor company's PAN, GST registration, and bank accounts after the merger?
The transferor company, once dissolved without winding up per the NCLT sanction order, ceases to exist as a legal entity — its PAN is eventually surrendered/deactivated for future use, its GST registration must be cancelled per GST law's transition-on-amalgamation provisions (with the transferee typically obtaining registration or amending its existing registration to reflect the absorbed business), and its bank accounts must be closed, with balances and operations transferred to the transferee's accounts. These are administrative but essential post-sanction steps that do not happen automatically merely because the NCLT order is passed.
In practice: We run a formal post-sanction consequential checklist for every merger — PAN, GST, EPFO, ESIC, bank mandates, insurance policies, and vendor/customer contract notifications. Treating the NCLT order as the finish line rather than the start of the operational wind-down is a mistake to avoid.
How much does PNPC charge for structuring and executing a merger or amalgamation?
Fees for merger and amalgamation engagements are scoped individually based on transaction complexity — number of entities involved, whether cross-border elements or CCI filing are triggered, valuation complexity, and whether litigation or objections are anticipated. PNPC provides a written scope and fee proposal after the pre-scheme structuring consultation, before any drafting work begins. This is not a fixed-fee, portal-style service — it is partner-led advisory and execution work billed transparently against an agreed scope.
In practice: We deliberately avoid quoting a headline number before understanding the transaction — a merger between two wholly-owned subsidiaries and a cross-border reverse merger with CCI implications are not comparable engagements, and pricing them the same would misrepresent the actual work involved.
Why engage PNPC rather than only a law firm for a merger?
A law firm drafts and files the scheme and represents the companies before NCLT — essential and necessary work. What a law firm typically does not do is model the tax outcome under the amalgamation, capital gains exemption, and loss carry-forward provisions of the Income Tax Act 2025 (successor to the historic Sections 2(1B), 47, and 72A of the Income-tax Act 1961), determine the correct Ind AS 103 accounting treatment and lead the appointed-date restatement, coordinate the statutory auditor's certificate, or manage the post-sanction consequential filings (GST transition, INC-28, PAS-3, licence updates). PNPC works alongside legal counsel — providing the tax, accounting, and compliance expertise that determines whether the scheme actually delivers the intended commercial and tax outcome, not just legal sanction.
In practice: Post-sanction difficulty is more likely where the accounting and tax mechanics are bolted on after the scheme is drafted rather than designed into it from the outset — which is why CA input at the structuring stage matters.
Can a scheme of amalgamation be withdrawn or modified after NCLT filing?
Yes, but it requires the Tribunal's leave. Before final sanction, the companies can apply to withdraw the petition, or seek to modify the scheme terms with fresh approval from the board and, where the modification is material, potentially fresh shareholder approval. Modifying a scheme after shareholder/creditor meetings have already approved a specific version is procedurally more involved than getting the terms right before those meetings are convened.
In practice: We treat the Second Motion petition stage as effectively final in practice — while withdrawal or modification remains legally possible, it costs significant time and legal fees, so our structuring work upfront is designed to avoid needing to revisit scheme terms after meetings are convened.
How does a merger affect an ongoing income tax assessment or pending litigation of the transferor?
Pending assessments, appeals, and litigation involving the transferor generally continue against or in favour of the transferee post-amalgamation, since the transferee steps into the transferor's position by virtue of the scheme's vesting effect. The transferor itself, however, ceases to exist: the Supreme Court in PCIT v Maruti Suzuki India Ltd (2019) held that an income-tax assessment framed in the name of an amalgamating company that no longer exists is a nullity, so proceedings after the scheme takes effect must be framed or continued in the transferee's name. However, the scheme and subsequent filings should explicitly address and disclose pending litigation and assessments so authorities and courts have a clear record of the transferee's succession to these matters.
In practice: We insist on a full litigation and assessment status disclosure schedule as part of scheme due diligence — inheriting undisclosed liabilities is one of the most consequential risks in any amalgamation, and it is entirely preventable with proper pre-scheme diligence.
What ongoing role does PNPC play after the merger is sanctioned?
Our engagement does not end at the NCLT sanction order. We lead the appointed-date accounting restatement, coordinate with the statutory auditor on the first post-merger financial statements, run the post-sanction regulatory consequential checklist (GST, PAN, licences, bank mandates), monitor the continuity conditions attached to any Section 72A loss carry-forward for the required holding period (Section 72A is a 1961 Act provision, which governs income up to FY 2025-26; from tax year 2026-27 the Income-tax Act 2025 applies with renumbered sections — confirm the equivalent), and integrate the combined entity's annual compliance calendar going forward. The sanction order is not the end of the work — it is the point at which the harder, ongoing work of making the combination operationally and financially real actually begins.
In practice: The gap between 'legally sanctioned' and 'operationally and financially integrated' is where the post-sanction integration work sits.
Where this sits in the wider engagement
Merger & Amalgamation Structuring rarely arrives on its own. The statutory basis and the current requirements are set out on the Merger & Amalgamation Structuring service page, and the related services are grouped under Corporate Finance.
What PNPC does
PNPC Global has practised since 1986 across India and the UAE. On Merger & Amalgamation Structuring we take the work end to end — reviewing the facts, preparing and filing what is required, and dealing with the authority through to closure.