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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