The NCLT's sanction order is not the end of the scheme process. It is the beginning of the compliance phase, and the scheme is not fully effective until the post-sanction obligations are discharged. The most significant obligations are the filing of the certified copy of the order with the ROC, the payment of stamp duty on the transfer of assets, and the dissolution of the transferor company.
The ROC Filing Under Section 232(5)
Section 232(5) requires the transferee company to file the certified copy of the Tribunal's order with the ROC within thirty days of the order. The filing is done in Form INC-28, and it must be accompanied by the certified copy of the order and the scheme. The filing is the event that triggers the effective date for certain purposes, and it is a condition of the scheme's implementation.
The failure to file within thirty days is a contravention of Section 232(5), and the company and its officers are liable to penalty. The ROC may also refuse to register the scheme if the filing is defective.
The Stamp Duty on Asset Transfers
The transfer of assets under the scheme is subject to stamp duty under the applicable state stamp laws. The stamp duty is payable on the instrument of transfer, and the scheme order is treated as the instrument of transfer for this purpose. The company must lodge the certified copy of the order with the Superintendent of Stamps for adjudication of the stamp duty payable.
The stamp duty on immovable property is typically the highest, and it can be a significant cost. The company must pay the stamp duty before the scheme is implemented, and the failure to pay may result in the registration of the transfer being refused.
The Dissolution of the Transferor Company
The transferor company is dissolved without winding up upon the scheme becoming effective. The ROC must strike off the name of the transferor company from the register of companies. The transferee company must preserve the books of accounts, papers, and records of the transferor company for the prescribed period, and it must not dispose of them without the prior permission of the Central Government under Section 239.
The Other Obligations
The scheme may require the transfer of employees, the novation of contracts, the transfer of licences and permits, and the transfer of tax registrations. The transferee company must comply with the applicable labour laws, the GST law, and the sectoral regulations. The transfer of employees is a statutory consequence of the scheme, and the continuous service of the employees must be preserved.
A scheme that is sanctioned but not fully implemented is a scheme that has not achieved its objective. The post-sanction compliance is not an afterthought; it is the operational core of the scheme.
Call to Action
Anuj Desai & Associates advises companies on post-sanction compliance—from the ROC filing in Form INC-28 and the stamp duty adjudication to the dissolution of the transferor company and the preservation of records. If your scheme has been sanctioned and you need to complete the implementation, we can help you manage the compliance timeline.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
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