Introduction:

In the engagement of merger and demerger, two dates are crucial, the "Appointed Date" and secondly the "Effective Date". Corporate managers spend a lot of era to plot the exact timing of these dates. 'Appointed Date' is normally settled to secure the interests & objects of the respective companies. And 'Effective Date' is finalized by high Court depends upon upon filing of a pure order of high Court subsequently Registrar of inis appointment .

Importance of 'Appointed Date' & 'Effective Date':

Any plot of compromise or treaty should identify a date in the plot itself as 'Appointed Date'. This 'appointed date' is crucial for arriving at values of assets and liabilities appearing in the books of Accounts both for the ambition of the transfer to the Transferee company and also for arriving at the value of shares for the transferor and transferee company viz. argument ratio. Generally, the first morning of a month or the first morning of a financial year is identified as the 'appointed date', even if the Court has the discretion to adjudicate any date as 'transfer date'.

The 'Effective Date' upon the extra hand is the date upon which the transferee company files the order of the high Court sanctioning the scheme when the Registrar of Companies for registration and in imitation of the order has hence filed the concentration or concurrence becomes energetic or having come into force from the 'Appointed date'. The operating date is subsequent date and the company has no manage beyond it.

Issues regarding 'Appointed Date' & 'Effective Date' and their effects upon Various Aspects of Restructuring:

1. Identification of Assets & Liabilities of Transferor Company:
As per the requirements of Section 391 to 394 of the Companies Act, 1956 the Transferor company should identify and quantify the assets and liabilities which are sought to be transferred to the transferee company below fusion or demerger. This identification & quantification of assets and liabilities should be done as upon Appointed Date.

The details of such assets & liabilities may be annexed as a schedule to the scheme. This identification gives certainty to the scheme, as members of both the companies acquire a clear idea very nearly what is going to be transferred?

2. Changes in the name/status of the company after Appointed Date:
There could be some changes in name, domicile or status of the company after the appointed date. Normally gnib appointment reach not operate the endorse of the scheme back tall Court unless they adversely play-act the rights & interests or obligations of the company and/or its members and creditors.

3. Accounting Treatment:
Normally the Transferee Company should, upon the plot coming into effect upon vigorous date photograph album the assets and liabilities of the Transferor Company vested in it pursuant to the Scheme, at the fair values thereof at the near of concern of the day rapidly preceding the Appointed Date.

4. addition in part capital & Appointed Date:
The shares are allotted and no-one else after the scheme is sanctioned by the court and not before. Further, the mass of authorised share capital is always on sanctioning of the scheme. in view of that any to-do to the plot upon the showground that on appointed date the ration capital of the Transferee Company was not sufficient to meet the expense of effect to the plot cannot be sustained.