NCLT on WebNotes

Companies Act 2013

Mon, 18 May 2026 00:00:00 +0000

The Companies Act 2013 is the foundational corporate-law statute of India, enacted by the Parliament of India on 29 August 2013 and brought into force in phases beginning 12 September 2013 with full operationality from 1 April 2014. The Act replaces the Companies Act 1956 and governs every aspect of Indian companies from incorporation through liquidation: corporate structure, share capital, board composition, financial reporting, audit, related-party transactions, mergers and acquisitions, corporate social responsibility, and dissolution. The Act applies uniformly to private companies, public companies (listed and unlisted), one-person companies, and section 8 (not-for-profit) companies, with specific provisions for each category.

National Company Law Tribunal (NCLT)

Mon, 18 May 2026 00:00:00 +0000

The National Company Law Tribunal (NCLT) is the specialist quasi-judicial body in India that adjudicates company-law and corporate-insolvency matters. Constituted under Chapter XXVII of the Companies Act 2013 (Sections 407-434), the NCLT became operational from 1 June 2016 and consolidated jurisdictions previously divided across the Company Law Board (CLB) under the Companies Act 1956, the High Courts (for company-law matters), and the Board for Industrial and Financial Reconstruction (BIFR) for industrial-sickness cases. The NCLT became the principal adjudicating authority for the Insolvency and Bankruptcy Code 2016 (IBC) when the IBC was operationalised in late 2016, further expanding its role.

How to handle a merger or demerger on Zerodha

Tue, 12 May 2026 00:00:00 +0000

A merger (or amalgamation) is a corporate action in which two or more companies combine into a single entity, with shareholders of the merging (transferor) company receiving shares of the surviving (transferee) company in exchange for their old shares, according to a share swap ratio. A demerger is the reverse: a company separates one or more of its businesses into a newly listed entity, with existing shareholders receiving shares in the new company in addition to (or in exchange for) a portion of their existing shares.

How to participate in a capital reduction on Zerodha

Tue, 12 May 2026 00:00:00 +0000

A capital reduction is a corporate action in which a listed company reduces its paid-up share capital. Capital reductions are used for several purposes:

To return surplus cash to shareholders (return of capital).
To write off accumulated losses against capital (loss absorption, with no cash return).
To restructure the balance sheet before a merger, demerger, or restructuring.
To reduce the face value of shares (face value reduction without cash return).

Capital reductions are governed by Section 66 of the Companies Act, 2013, and require approval from both the shareholders (by special resolution) and the National Company Law Tribunal (NCLT). After NCLT sanction, the company reduces its share capital by cancelling or buying back a portion of paid-up capital, or by reducing the face value per share.

How to participate in a scheme-of-arrangement event on Zerodha

Tue, 12 May 2026 00:00:00 +0000

A scheme of arrangement is a court-approved corporate restructuring mechanism available under Sections 230 to 232 of the Companies Act, 2013. It is the umbrella legal structure under which mergers, demergers, capital reductions, amalgamations, and complex business reorganisations are implemented in India. The scheme requires approval from:

The shareholders of the company (by a majority in number representing three-fourths in value of those voting).
The creditors (if creditors are affected).
The National Company Law Tribunal (NCLT), which gives the final sanction.

Once the NCLT order is obtained and filed with the Registrar of Companies (RoC), the scheme is legally effective and binding on all shareholders, including those who voted against it. Individual shareholder participation during the scheme process (voting) is, however, important and a legal right.