Amended and updated notes on section 238 of Companies Act 2013. Detail discussion on provisions and rules related to registration of offer of schemes involving transfer of shares.
Chapter XV (Sections 230–240) of the Companies Act, 2013 (CA 2013) deals with the provisions related to Compromises, Arrangements and Amalgamations. Section 238 of CA 2013 provides for registration of offer of schemes involving transfer of shares.
Recently, we have discussed in detail section 237 (Power of Central Government to provide for amalgamation of companies in public interest) of CA 2013. Today, we learn the provisions of section 238 of Companies Act 2013.
The provisions of section 238 are effective from 15-Dec-2016. You may refer Notification No. S.O. 3677(E) issued dated 07-12-2016. In this article, you will learn detail of the provisions of section 238 of the Companies Act 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XV |
| Chapter Name | Compromises, Arrangements and Amalgamations |
| Section No. | 238 |
| Section Name | Registration of offer of schemes involving transfer of shares |
| Monthly Updated Edition | Company Law PDF |
Section 238 of Companies Act 2013: Registration of offer of schemes involving transfer of shares
Section 238 shall come into force on 15th December, 2016 vide Notification No. S.O. 3677(E) dated 07.12.2016.
(1) In relation to every offer of a scheme or contract involving the transfer of shares or any class of shares in the transferor company to the transferee company under section 235, —
- (a) every circular containing such offer and recommendation to the members of the transferor company by its directors to accept such offer shall be accompanied by such information and in such manner as may be prescribed;
- (b) every such offer shall contain a statement by or on behalf of the transferee company, disclosing the steps it has taken to ensure that necessary cash will be available; and
- (c) every such circular shall be presented to the Registrar for registration and no such circular shall be issued until it is so registered:
Provided that the Registrar may refuse, for reasons to be recorded in writing, to register any such circular which does not contain the information required to be given under clause (a) or which sets out such information in a manner likely to give a false impression, and communicate such refusal to the parties within thirty days of the application.
(2) An appeal shall lie to the Tribunal against an order of the Registrar refusing to register any circular under sub-section (1).
(3) The director who issues a circular which has not been presented for registration and registered under clause (c) of sub-section (1), shall be liable to a penalty of one lakh rupees.