This document discusses and compares three types of corporate restructuring: amalgamation, absorption, and reconstruction. Amalgamation involves merging two or more companies into a single new company, while absorption involves one company taking over another and no new company is formed. Reconstruction can occur externally, where one company is liquidated and a new company is formed, or internally, where no companies are liquidated or new companies formed. The document outlines the key steps involved in each process, including passing special resolutions, meetings of shareholders and creditors, and regulatory approval.

1. AMALGAMATION, ABSORPTION
&
RECONSTRUCTION
Submitted by Guided by
Vijay Somase Prof Mahale .S. Sir

2. AMALGAMATION
Ab.Ltd
A.Ltd B.Ltd
One or more companies are
liquidated
One new company is formed
The nature of business of
both companies is similar

3. ABSORPTION
A.Ltd
A.Ltd B.Ltd
One or more companies are
liquidated
No new company is formed
The nature of business of
both companies is similar
Generally larger company
purchases the business of
smaller company

4. RECONSTRUCTION
There are two alternative of reconstruction
 External reconstruction
 Internal reconstruction

5. EXTERNAL RECONSTRUCTION
B.Ltd
A.Ltd
One companies are liquidated
One new company is formed

6. INTERNAL RECONSTRUCTION
A.Ltd
No companies are liquidated
No new company is formed

7. PROCESS
Passing of special resolution
Meeting of share holder
Meeting of company creditors
Approval of the SEBI

8.  Step 1 prepare the balance sheets of the companies
on the date of liquidation
 Step 2 open a realisation account and transfer all
assets and liabilities to this account
 Step 3 calculate purchase consideration on the basis
of terms and conditions agreed upon
 Step 4 credit realisation account by purchase
consideration
 Step 5 calculate profit and loss on realisation
account

9.  Step 6 transfer share capital, reserve and surplus to
shareholder account
 Step 7 transfer profit and loss on realisation to
shareholder account
 Step 8 receiving of purchase consideration in the
form of share/debentures in the new company
 Step 9 payment to debenture holder and preference
shareholder
 Step 10 distribution of the share/debentures of new
company among the share holder

10. THANK YOU