On February 01, 2021, the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2021 came into effect in order to amend Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
The amendment modifies Section 25 dealing with Merger or Amalgamation of certain companies and inserts a new clause providing a scheme of merger or amalgamation under Section 233 of the Act which may be entered into between any of the following class of companies:-
- two or more start-up companies; or
- one or more start-up company with one or more small company.
The amendment also provides an explanation to the Rule defining the term “start-up company” as a private company incorporated under the Companies Act, 2013 or Companies Act, 1956 and recognised as such in accordance with notification number G.S.R. 127 (E), dated the 19th February, 2019 issued by the Department for Promotion of Industry and Internal Trade.