{"id":316820,"date":"2024-03-12T18:30:11","date_gmt":"2024-03-12T13:00:11","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=316820"},"modified":"2024-03-12T18:31:39","modified_gmt":"2024-03-12T13:01:39","slug":"mca-enhances-existing-threshold-value-of-assets-and-turnover-for-ease-of-doing-business","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/03\/12\/mca-enhances-existing-threshold-value-of-assets-and-turnover-for-ease-of-doing-business\/","title":{"rendered":"MCA enhances existing threshold value of assets and turnover for purpose of combination filing"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\">On 7-3-2024, the Ministry of Corporate Affairs issued 2 separate notifications vide which it increased the existing threshold value of assets and turnover mentioned under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001531277\" target=\"_blank\" rel=\"noopener\">5<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002783336\" target=\"_blank\" rel=\"noopener\">Competition Act, 2002<\/a> (&#8216;Act&#8217;) relating to &#8220;combinations&#8221; and thresholds allowing exemption from notification based on assets and turnover of the target company.<\/p>\n<p style=\"font-weight: bold;\">Key Points:<\/p>\n<ol style=\"list-style-type: decimal;\">\n<li>\n<p>Central Government in consultation with the Competition Commission of India (&#8216;CCI&#8217;) has enhanced the value of assets and turnover by 150% for the purposes of Section 5 of the Act on the basis of wholesale price index.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Enterprises have been exempted<\/span> from being parties in the following situations, where the <span style=\"font-weight: bold;\">value of assets<\/span> being acquired\/ taken control of\/ merged\/ amalgamated is not more than <span style=\"font-weight: bold;\">Rs. 450<\/span> crores in India\/ <span style=\"font-weight: bold;\">turnover<\/span> of not more than <span style=\"font-weight: bold;\">Rs. 1250<\/span> crore in India:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Acquisition referred in <span style=\"font-weight: bold;\">Section 5(a)<\/span> of the Act;<\/p>\n<\/li>\n<li>\n<p>Acquiring of control by a person over an enterprise when such person has already direct or indirect control over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or provision of a similar or identical or substitutable service referred to in <span style=\"font-weight: bold;\">Section 5(b)<\/span> of the Act;<\/p>\n<\/li>\n<li>\n<p>any merger or amalgamation referred to in <span style=\"font-weight: bold;\">Section 5(c)<\/span> of the Act.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>In case, where a portion of enterprise\/ division\/ business is being acquired\/ taken control of\/ merged\/ amalgamated <span style=\"font-weight: bold;\">with another enterprise<\/span>, the value of asset of said portion\/ division\/ business, the threshold will be calculated on relevant assets and turnover.<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Such a relevant value will be determined by taking the book value of assets shown in the audited books of accounts, where the financial statement has not yet become due to be filed.<\/p>\n<\/li>\n<li>\n<p><span style=\"font-weight: bold;\">Value of assets will include-<\/span> value of goodwill\/ value of copyright, patent, permitted use, collective mark, registered proprietor, registered trademark, registered user, homonymous geographical indications, geographical indications, design or layout- design or similar other commercial rights.<\/p>\n<\/li>\n<li>\n<p style=\"margin-bottom: 3%;\">Turnover will be certified by a statutory auditor on the basis of the latest available accounts of the company.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<p style=\"font-weight: bold; text-decoration: underline;\">Note:<\/p>\n<p style=\"margin-bottom: 3%;\"><span style=\"font-weight: bold;\">Section 5<\/span> mandates that all transactions amounting to &#8220;combinations&#8221; exceeding a specified threshold of assets or turnover are supposed to seek prior approval of the Competition Commission of India (&#8216;CCI&#8217;) before they are consummated.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">Value of assets and turnover increased by 150% based on the wholesale price index.<\/p>\n","protected":false},"author":67515,"featured_media":316824,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,1193],"tags":[2881,5461,37700,18751,66302,57707,34729,2560,32751],"class_list":["post-316820","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislationupdates","category-notifications","tag-Assets","tag-cci","tag-combinations","tag-competition-act","tag-competition-commissionof-india","tag-enterprises","tag-mca","tag-Ministry_of_Corporate_Affairs","tag-turnover"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Threshold for value of Assets &amp; Turnover increased | SCC Times<\/title>\n<meta name=\"description\" content=\"Ministry of Corporate Affairs increased 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