Tax-Neutral Reorganization

Company Restructuring Advisory

Tax-neutral mergers, demergers, slump sales, and business transfers under Sections 230-232 and the Income Tax Act — with NCLT filing and post-restructuring integration.

⏱ 8–20 Weeks 📋 15+ Deliverables 🌍 India

What is Company Restructuring?

Corporate restructuring involves reorganizing a company's ownership, operational, or legal structure to improve efficiency, unlock value, or achieve regulatory compliance. In India, this is governed by the Companies Act 2013 (Sections 230-232) and the Income Tax Act (Sections 391-394, 47).

Why It Matters

A poorly structured reorganization can trigger capital gains tax, stamp duty, and GST liabilities running into crores. Conversely, a well-designed scheme under Section 47 can achieve complete tax neutrality while preserving business continuity and creditor protection.

SilverSiX handles the entire restructuring lifecycle — from scheme conceptualization and valuation to NCLT filing, shareholder approvals, and post-merger integration.

📊 Restructuring Options

  • Merger / Amalgamation (Section 232)
  • Demerger / Spin-off (Section 47)
  • Slump Sale (Section 50B)
  • Itemized Business Transfer
  • Reduction of Capital (Section 66)
  • Reverse Merger

Comprehensive Restructuring Services

🔄 Merger & Amalgamation

Complete merger advisory including scheme drafting, NCLT filing, and tax-neutral structuring under Section 47.

  • Scheme of Amalgamation drafting
  • Valuation fairness opinion
  • Share swap ratio determination
  • NCLT petition & hearings

✂️ Demerger & Spin-off

Tax-neutral demerger advisory to unlock value, separate business lines, or facilitate strategic exits.

  • Demerger scheme under Section 47(vib)
  • Allotment of resulting company shares
  • Creditor protection & sanction
  • Post-demerger compliance

📦 Slump Sale

Transfer of an undertaking as a going concern with specific tax implications under Section 50B.

  • Slump sale vs. itemized sale analysis
  • Net worth computation
  • Section 50B capital gains working
  • GST & stamp duty optimization

⚖️ NCLT & Regulatory

End-to-end NCLT representation and regulatory clearances for scheme implementation.

  • NCLT petition drafting & filing
  • Regional Director (RD) filings
  • Official Liquidator reports
  • ROC filings (Form INC-28, etc.)

💰 Tax-Neutral Structuring

Ensuring reorganization qualifies for tax exemption under Sections 47, 49, and 72A of the Income Tax Act.

  • Section 47(via) to (vii) compliance
  • Carry-forward of losses (Section 72A)
  • Cost of acquisition determination
  • Stamp duty exemption claims

🤝 Stakeholder Management

Negotiation and communication with shareholders, creditors, employees, and regulators.

  • Shareholder resolution drafting
  • Creditor meeting & sanction
  • Employee communication & ESOP handling
  • SEBI / stock exchange compliance (if listed)

Our Restructuring Process

1

Objective & Feasibility

Understanding the commercial rationale and conducting a feasibility study on tax, regulatory, and creditor implications.

2

Structure Design

Selecting the optimal restructuring mechanism (merger, demerger, slump sale) and designing the scheme.

3

Valuation & Fairness

Independent valuation and fairness opinion to support the share exchange ratio or sale consideration.

4

Scheme Drafting & Approvals

Drafting the scheme, convening shareholder/creditor meetings, and securing board and regulatory approvals.

5

NCLT Filing & Sanction

Filing the NCLT petition, responding to objections, and obtaining the final court order.

6

Implementation & Integration

Effective date compliance, asset transfer, employee migration, and post-merger integration.

What You Receive

DeliverableDescriptionTimeline
Feasibility ReportTax, regulatory & creditor impact analysisWeek 2
Structuring MemoRecommended mechanism with rationaleWeek 3
Valuation ReportIndependent valuation & fairness opinionWeek 4–6
Scheme DraftScheme of Arrangement / Amalgamation / DemergerWeek 5
Tax Impact NoteSection 47, 50B, 72A & GST analysisWeek 5
NCLT PetitionDrafted petition with all annexuresWeek 6
Compliance ChecklistPost-sanction filings (ROC, SEBI, tax)Week 8
Integration PlanAsset, employee & contract migration SOPWeek 10

Common Questions

Is a merger always tax-neutral?
If structured under Section 47(vi) or (vii) of the Income Tax Act, a merger can be tax-neutral for both the company and shareholders. However, specific conditions must be met, including continuity of business and shareholding.
What is the difference between a demerger and a slump sale?
A demerger is a court-approved, tax-neutral reorganization under Section 47(vib). A slump sale is a negotiated sale of an undertaking as a going concern, taxable under Section 50B based on net worth.
How long does NCLT approval take?
Typically 3–6 months from filing, depending on the bench, complexity, and objections. Expedited processes are available for urgent cases.
Can losses be carried forward after a merger?
Yes, under Section 72A, unabsorbed losses and depreciation of the amalgamating company can be carried forward by the amalgamated company, subject to conditions.
Is stamp duty payable on a merger?
Stamp duty is generally payable on the court order sanctioning the scheme. However, many states offer concessional rates or exemptions for intra-group mergers. We optimize this as part of structuring.

Ready to Structure Your Restructuring?

Book a confidential discovery call with our advisory team. We assess your situation and outline a clear execution roadmap within 48 hours.

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