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Sec 238 Companies Act 2013: Offer of Schemes Regn. (Shares Transfer)

SECTION-238 (Registration of offer of schemes involving transfer of shares) under CHAPTER-XV (Compromises, Arrangements and Amalgamations) of the Companies Act, 2013 -

(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 punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.

Extra Notes for Readers

(1) The Companies Act, 2013 received the assent of the President on the 29th August, 2013 (Published in the Gazette of India, Extraordinary, Part II - Section 1 by Ministry of Law and Justice, Legislative Department on 30th August, 2013)

(2) Section 238 of the Companies Act 2013 was notified by MCA Notification S.O. 3677(E) dated 7th December 2016 (w.e.f. 15th December 2016)

(3) Relevant rule(s) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (w.e.f. 15th December, 2016)
  • Rule 28 - Circular containing scheme of amalgamation or merger
[Do check for any further amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016]

This page was last updated on 2nd May, 2017.

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