Introduction:

In the proceedings of fusion and demerger, two dates are crucial, the "Appointed Date" and secondly the "Effective Date". Corporate managers spend a lot of time to plot the exact timing of these dates. 'Appointed Date' is normally granted to secure the interests & objects of the respective companies. And 'Effective Date' is finalized by high Court depends on upon filing of a utter order of high Court subsequently Registrar of irp appointment .

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

Any scheme of compromise or settlement should identify a date in the scheme 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 point of the transfer to the Transferee company and plus for arriving at the value of shares for the transferor and transferee company viz. disagreement ratio. Generally, the first daylight of a month or the first daylight of a financial year is identified as the 'appointed date', while the Court has the discretion to pronounce any date as 'transfer date'.

The 'Effective Date' upon the other hand is the date upon which the transferee company files the order of the high Court sanctioning the scheme with the Registrar of Companies for registration and following the order has hence filed the assimilation or harmony becomes involved or having come into force from the 'Appointed date'. The functional date is subsequent date and the company has no run higher than it.

Issues on the subject of 'Appointed Date' & 'Effective Date' and their effects on 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 under combination or demerger. This identification & quantification of assets and liabilities should be done as on Appointed Date.

The details of such assets & liabilities may be annexed as a schedule to the scheme. gnib appointment app gives authenticity to the scheme, as members of both the companies get a determined idea not quite 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, habitat or status of the company after the appointed date. Normally such changes pull off not con the certify of the plot since high Court unless they adversely feat the rights & interests or obligations of the company and/or its members and creditors.

3. Accounting Treatment:
Normally the Transferee Company should, on the scheme coming into effect upon involved date record the assets and liabilities of the Transferor Company vested in it pursuant to the Scheme, at the fair values thereof at the close of issue of the day hurriedly preceding the Appointed Date.

4. growth in allowance capital & Appointed Date:
The shares are allotted unaccompanied after the plot is sanctioned by the court and not before. Further, the layer of authorised ration capital is always on sanctioning of the scheme. correspondingly any excitement to the plan on the ring that upon appointed date the part capital of the Transferee Company was not passable to provide effect to the plot cannot be sustained.