Corporate affairs ministry clarifies on 'appointed date' for mergers, amalgamations

The corporate affairs ministry on Wednesday issued a clarification regarding 'appointed date' in the scheme of mergers and amalgamations under the Companies Act.

"Companies may choose the 'appointed date' of the merger/ amalgamation based on occurrence of an event, which is relevant to the merger between companies.

"This would allow the companies concerned to function independently till such event is actually materialised," the ministry said in a release.

Further, the ministry said the term 'appointed date' used in Section 232(6) of the Companies Act, 2013, would be deemed to be the 'acquisition date' for the purpose of conforming to Ind AS 103 standard dealing with business combinations.

Ind AS refers to Indian Accounting Standards.

Stakeholders can align the 'appointed date' of merger/ amalgamation in accordance with their business considerations or legal requirements, the release said.

Under Ind AS 103, which deals with the accounting treatment, uses the expression 'acquisition date', as a date when the acquirer takes control of the acquiree.