Mergers and Acquisitions Advisory in India
Advisory on due diligence, valuation, deal structure and approvals for mergers, demergers and acquisitions.
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Mergers and acquisitions advisory helps owners of companies and LLPs plan, structure and complete a combination, a demerger or the purchase of a business or shares. It is relevant to founders consolidating group entities, promoters buying out partners, and companies looking to acquire a smaller business. Our team provides advisory support on due diligence, valuation inputs, choice of structure, tax and stamp duty impact, and the approvals process, including schemes under Sections 230 to 232 of the Companies Act, 2013. This is advisory and compliance support. Legal drafting and representation before tribunals are arranged through practising advocates or other authorised professionals.
Who provides this service: our team of Chartered Accountants.
Who Needs Mergers and Acquisitions?
- Promoters planning to merge group companies to simplify structure
- Companies acquiring a business, brand or controlling stake
- Owners of a division who want to demerge it into a separate entity
- Investors and acquirers who want financial and compliance diligence before closing
- Partners or shareholders planning a buyout or exit
Key Benefits
- Structure options compared side by side: amalgamation, demerger, slump sale or share purchase
- Financial and compliance due diligence that surfaces liabilities before you commit
- Tax neutrality conditions reviewed early so the deal is not undone by a missed requirement
- Support with the NCLT scheme process and, where eligible, the fast-track route
- Awareness of stamp duty, competition law and sector-specific approvals from the planning stage
- Coordination between CA, CS and legal professionals so the deal moves on one timeline
How It Works
Understand the objective
We begin with the commercial reason for the deal, the entities involved, ownership, key assets and liabilities, and the timeline you want, so the advice is shaped around what you are trying to achieve.
Due diligence
Financial, tax and statutory records of the target are examined to identify contingent liabilities, pending notices, compliance gaps and related-party dealings that can change the price or the structure.
Select the structure
Merger, demerger, slump sale and share acquisition each carry different tax, stamp duty and approval consequences. We compare them in a short note so you can decide with the trade-offs in view.
Valuation inputs and deal terms
We assemble financial data and workings that a registered valuer needs, and help frame the share exchange ratio or price, payment terms and conditions precedent for the draft agreements.
Approvals and filings
Board and shareholder resolutions, creditor meetings, the application to the NCLT or Regional Director for the fast-track route, and notices to authorities are prepared with advocates handling appearances.
Post-deal integration
After approval we help with ROC filings, tax registrations, transfer of licences and contracts, accounting for the transaction and alignment of compliance calendars across the combined business.
Documents Required
- Memorandum and articles or LLP agreement of each entity
- Audited financial statements for recent years
- Income tax and GST returns and assessment orders
- Shareholding pattern and list of directors or partners
- Details of assets, loans, charges and contingent liabilities
- Material contracts, licences and permits
- Employee and statutory dues records
- Draft term sheet or letter of intent, if available
- Board resolutions and prior approvals related to the transaction
Timeline and Fees
Indicative timeline: Due diligence and structuring often take a few weeks. A scheme that needs NCLT sanction typically runs for several months, while a fast-track merger is usually shorter. Actual time depends on the authority, the bench schedule and the objections received.
Professional fee: The fee depends on deal size and structure, the number of entities, the depth of diligence, the approvals required and the involvement of advocates and valuers. A scope and fee basis is shared after an initial discussion.
What Can Go Wrong if This Is Missed or Done Incorrectly
- Hidden liabilities found after closing can fall on the acquirer without protective terms in the agreement
- Missing a condition for tax neutrality can make gains taxable in the hands of the company or shareholders
- Proceeding without a required regulatory approval can invalidate or delay the transaction
- Incorrect stamp duty treatment can result in later demands and penalties under state laws
- Poor integration of compliance after the deal can cause filing defaults across entities
Frequently Asked Questions
What is the difference between a merger and an acquisition?
In a merger or amalgamation, two or more companies combine and the transferor typically ceases to exist, with its assets and liabilities moving to the other company. In an acquisition, one party buys shares or business assets, and both entities may continue. Legal process, tax and stamp duty differ for each route.
What is the NCLT merger process under Sections 230 to 232?
A scheme of arrangement is approved by the board, filed with the National Company Law Tribunal, and put to creditors and shareholders where directed. The Tribunal sanctions it after hearing objections and regulators. Timelines vary with the bench and objections, so the process needs careful documentation and legal representation.
What is a fast-track merger?
The Companies Act provides a simpler route for certain mergers, including between small companies and between a holding company and its wholly owned subsidiary. Approval comes from the Regional Director rather than the Tribunal when conditions are met. Eligibility depends on the company profile, so it needs to be tested before choosing the route.
Can a merger be tax neutral?
Income tax law offers relief for qualifying amalgamations and demergers if prescribed conditions are met, such as continuity of shareholders and transfer of all relevant assets and liabilities. Missing a condition can withdraw the benefit. Conditions should be mapped out at planning stage and tracked after the deal.
Is CCI approval needed for every acquisition?
No. The Competition Commission of India reviews combinations that cross thresholds set under competition law, and the thresholds are revised from time to time. Smaller deals may fall below them. We check whether your transaction is notifiable using the current government notifications before signing binding documents.
What is a slump sale?
A slump sale is a transfer of a business undertaking as a whole for a lump sum, without values assigned to individual assets and liabilities. It has its own tax treatment under the Income-tax Act. It is often used when a buyer wants one division rather than the entire company.
Official Sources
Rules, forms and fees change. Check the current position on the official portal:
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Last reviewed: . Laws, fees and procedures change; check the official portal before you act.
Disclaimer: The information on this page is for general informational purposes only and does not constitute professional legal, tax or compliance advice. Requirements vary by situation. Please consult a qualified CA or CS for advice specific to your needs. Government fees and timelines are subject to change; verify with the relevant authority before proceeding.