1. Yes, Mergers Are Permitted under the Companies Act, 2013

• A Public Limited Company can legally merge with another company—public or private—under Sections 230 to 232 of the Companies Act, 2013.
  
• Mergers may involve the amalgamation, absorption, or consolidation of one or more companies into another.
  
• The merger must serve a legitimate business objective such as expansion, restructuring, or operational efficiency.
  
• The resulting entity may continue as a Public Limited Company, subject to compliance.
  

2. Types of Permitted Mergers

• Public-to-Public Company Merger: Two or more public companies merge to form a larger entity.
  
• Public with Private Company Merger: A public company may merge with a private company, but the resulting company must remain public if one of the merging entities was public.
  
• Cross-border Mergers: Permissible between Indian and foreign companies (in approved jurisdictions) under RBI and FEMA rules.
  
• Vertical, horizontal, or conglomerate mergers are all allowed based on the business model.
  

3. Legal Procedure for Merger

• The companies involved must jointly prepare a Scheme of Arrangement or Merger.
  
• Obtain approval from the Board of Directors of each company.
  
• Apply to the National Company Law Tribunal (NCLT) for calling meetings of shareholders and creditors.
  
• The scheme must be approved by:
  
  • 75% of shareholders and creditors (by value) present and voting
    
• After NCLT approval, the scheme is filed with the Registrar of Companies (ROC), and the merger becomes effective.
  
• The assets, liabilities, and operations of the merged company are transferred to the surviving entity.
  

4. Approvals and Regulatory Filings

• Must comply with:
  
  • SEBI (for listed companies)
    
  • Competition Commission of India (CCI) if the thresholds are met
    
  • Income Tax Act for capital gains and exemptions
    
  • FEMA/RBI, in case of foreign investment or cross-border elements
    
• File necessary forms: CAA-9, CAA-11, CAA-12, and other prescribed documents with the ROC and NCLT.
  

5. Tax and Compliance Implications

• Mergers may qualify for tax-neutral treatment under Section 47 of the Income Tax Act if conditions are met.
  
• Capital gains are exempt if shares are exchanged and the resulting company meets continuity requirements.
  
• Post-merger, the financial statements, share capital, employee structures, and licenses must be updated and restructured accordingly.