Key Takeaways: - Arrangement with creditors, members & holders of units of shares - Dissenting shareholders rights - Joint offers

1. Arrangements, Reconstruction & Amalgamation
under Singapore Companies Act- Part I
CS Meenakshi Jayaraman

2. Credits and Acknowledgments
Iswariya BS
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3. 3
Legends used in the Presentation
3
Act Singapore Companies Act
Sec. Section
SGD Singapore Dollar
u/s Under section

4. 4
Presentation Schema
Power to compromise
with creditors, members
& holders of units of
shares
Information as to
compromise with
creditors, members &
holders of units of
shares
Approval of
compromise /
arrangement by Court
Power to acquire shares
from dissenting
shareholders
Joint offers
Effect of impossibility,
etc. of communicating /
accepting offer
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5. Sec. 210- Power to compromise with creditors,
members & holders of units of shares
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6. 6
Arrangement
•Includes a re-organisation of the share capital of a Company by the
consolidation of shares of different classes / by the division of shares into shares
of different classes / by both these methods
Company being
wound up
•Means any corporation liable to be wound up under the Insolvency,
Restructuring and Dissolution Act 2018
Holder of units of
shares
•It does not include a person who holds units of shares only beneficially
Meaning

7. 7
Compromise /
Arrangement between
Company and
Creditors / any class of
them
Members / any class of
them
Holders of units of
shares / any of them
Collectively called as persons involved in the compromise / arrangement

8. 8
Where a compromise / arrangement is proposed by the Company, the persons involved and
a liquidator (in case of Company being wound up) may make application to the Court
Court in turn may order for a meeting, in which the persons involved may be summoned
in such manner as the Court directs
Adjourned meeting: If resolution for adjournment is approved by majority in number
representing 3/4th value of the persons involved
Compromise / Arrangement shall be binding: If majority in no. of persons involved present
in person or by proxy agree or majority in number or such number as the Court may order
representing 3/4th in value of persons involved present in person or by proxy agree and if it is
approved by order of the Court, then such Compromise / Arrangement shall be binding on
the persons involved and on the liquidator and contributories (in case of Company being
wound up)

9. 9
• Lodging of order of Court: Court’s order shall be lodged with the Registrar and the same shall
have effect upon such lodgement / earlier date as the Court may determined and as specified
in the order
Penalty: Company
& officer in default
Fine:< 2,000 SGD
Order to be annexed with company’s constitution:
Every copy of the constitution issued after the order
has to be annexed with the order
Exception: If court by order exempts any company
or determines the period during which the company
shall comply
Report from Accountants / Solicitors: If a meeting
of members by resolution directs, directors shall
instruct such Accountants / Solicitors / both named
in the resolution to report on the proposals made
and forward their report to the directors of the
Company and make such reports available at the
registered office of the Company at least 7 days
before the date of meeting ordered by Court

10. 10
Restrain from proceedings: Where no order / resolution passed for winding up of the
Company, Court may restrain further proceedings against the Company on receiving
application from the persons involved except by leave of the Court and subject to such terms
as the Court imposes
Transfer of consideration to official receiver: If the Compromise / Arrangement involves
any money / other consideration which is held in trust by any person, it shall be
transferred to the official receiver after the expiration of 2 years and before the
expiration of 10 years from the date of receipt
Treatment of consideration as per section 197 of Insolvency, Restructuring and Dissolution
Act, 2018 (Unclaimed assets to be paid to official receiver): Any unclaimed or undistributed
money shall be treated as Unclaimed assets which will lie in the hands of official receiver

11. Sec. 211- Information as to compromise with
creditors, members & holders of units of shares
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12. 12
• Every notice of the meeting that is sent to the persons involved shall be annexed with a
statement –
• Explaining the effect of compromise / arrangement
• Explanation by debenture trustee, if the rights of debenture holders are affected and
• Material interests of directors, whether as directors or persons involved and the effect
thereon
• Penal provision:
• Company & every officer (includes liquidator / debenture trustee) in default
• Fine : < 5,000 SGD / Imprisonment : < 12 months
• If notice given by advertisement includes a notification that the statement can be obtained,
every person involved shall on making application in the manner indicated in the notice, be
furnished a copy of the statement (free of cost)
• Each Director & each trustee of debenture holder shall give notice to the Company within 7
days of the receipt of request for information as to such matters

13. Sec. 212-Approval of compromise /
arrangement by Court
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14. 14
Continuation by / against the transferee company of any legal
proceedings pending by / against the transferor company
Allotting / appropriation by the transferee company of any shares,
debentures, policies / other like interests in that company which under
the compromise / arrangement are to be allotted / appropriated by
that company to / for any person
Provision to be made for any persons who, dissent from the
compromise / arrangement and such other incidental matters
Dissolution, without winding up, of the transferor company
If an application
is made to the
Court and it is
shown that under
the scheme
whole / any part
of the
undertaking /
property of the
Company is
transferred by
the transferor
company to
transferee
company, the
court may order
the following:
Transfer to the Transferee company the whole / any part of the
undertaking and property / liabilities of the Transferor Company
Such incidental, ancillary and supplementary matters to secure that the
reconstruction or amalgamation shall be fully and effectively carried out

15. 15
Lodging of Order
•Order has to be lodged with the Registrar within 7 days and if it relates to land,
it has to be lodged also with the appropriate authority concerned with
registration and recording of land dealings
•And the order shall have effect only when the respective entries are made by
the appropriate authority
Penal provision
•Company & every officer in default
•Fine: < 2,000 SGD and a default penalty
Meaning •Liabilities – includes duties
•Property - includes property, rights and powers of every description

16. Sec. 215 – Power to acquire shares from
dissenting shareholders
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17. 17
 If any scheme / contract involves transfer of all the shares / all of the shares in a
particular class of the transferor company and it is approved by the holders of not less
than 90% of total no. of shares (excluding treasury shares and shares already held by
transferee company)
 Transferee company may at any time within 2 months after the approval give notice to
the dissenting shareholders, that it desires to acquire their shares
 Within 1 month of receipt of aforesaid notice, the dissenting shareholder can make
notice to the court / require the transferor company to provide the details of
dissenting shareholders
 Transferee company shall unless on an application made by dissenting shareholders
within 1 month from the date on which notice was given / within 14 days of supplying the
statement to (whichever is later), be entitled and bound to acquire the shares
Dissenting shareholder includes a shareholder who has not assented to the scheme / contract and
any shareholder who has failed / refused to transfer his shares to the transferee in accordance
with the scheme / contract

18. 18
Under any scheme / contract, if the transferee company holds 90% of the total
no. of shares / any particular class of shares of the company (includes treasury
shares)
Then, the transferee shall within 1 month from the date of transfer give notice
to the dissenting shareholders
Within 3 months from the receipt of the aforesaid notice, such shareholder may
require the transferee to acquire the shares and in that case the transferee is
entitled and bound to acquire those shares
If the Court has not made any order contrary to the scheme /
After the expiration of 1 month of giving notice /
14 days after providing details of dissenting shareholders
Transferee can transfer the amount / consideration for acquiring the shares of
the transferor company

19. 19
Any sums received by the transferor company shall be paid into a separate bank account, and
any such sums and any other consideration so received shall be held by the transferor
company in trust
Treatment of consideration as per section 197 of Insolvency, Restructuring and Dissolution
Act, 2018 (Unclaimed assets to be paid to official receiver): Any unclaimed or undistributed
money shall be treated as Unclaimed assets which will lie in the hands of official receiver
Transfer of consideration to official receiver: If the Compromise / Arrangement involves any
money / other consideration which is held in trust by any person, it shall be transferred to the
official receiver after the expiration of 2 years and before the expiration of 10 years from the
date of receipt

20. Sec. 215 AA- Joint offers
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21. 21
• In other cases, by the joint transferees acquiring / unconditionally /
conditionally contracting to acquire the necessary shares either jointly /
separately
 If a scheme involves an offer to acquire all of the shares / of the shares in any particular class im a
Company, by 2 or more persons jointly, they can exercise the right to acquire the shares only if
any of the following conditions are satisfied-
• In the case of acquisitions of shares by virtue of acceptances of the offer, by
the joint transferees acquiring / unconditionally contracting to acquire the
necessary shares jointly or
 Rights and obligations of the transferee under sec. 215 are respectively joint rights and joint
and several obligations of the joint transferees
 Notices given to the dissenting shareholders has to be given by all the transferees and any
other notices sent to / given by the transferee company is complied if the same is sent to /
given by any one of them

22. Sec. 215 AB- Effect of impossibility, etc. of
communicating / accepting offer
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23. 23
Where an offer is made to acquire shares in a company and there are persons for whom, by reason of
the law of a country / territory outside Singapore, it is impossible to accept the offer / more difficult to
do so, that does not prevent the offer from being an offer made u/s 215 of the Act
• Where an offer to acquire shares in the Company is not communicated to the shareholders of the
Company, the same does not prevent the offer from being an offer made u/s. 215 of the Act if -
• Those shareholders
have no address in
Singapore registered
with the company
• the offer was not
communicated to those
shareholders —
(i) in order not to contravene
the law of a country /
territory outside Singapore or
(ii) because communication to
those shareholders would in
the circumstances be unduly
onerous and
• If the offer is either
published in the Gazette
or
• It can be inspected / a
copy of it obtained, at a
place in Singapore / on a
website and a notice is
published in the Gazette
specifying the address of
that place / website

24. Thank You!
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