Demerger of a private Ltd company

[GOPAL HARLALKA]

In the case of demeger resulting company has been incorporated.

Appointed date of demerger is 1st April 2020

Application will be filed before NCLT in first week of May 2020 after preparing Balance sheet as on 31st March 2020

My query is that can a resulting company commenced operation on the strength of application filed or have to wait till the sanction is passed by NCLT

[DR.MARIAPPAN GOVINDARAJAN]

In my view sanction of NCLT is required.

AI Summary

Demerger commencement: resulting company must await NCLT sanction before starting operations after filing application.
The core issue is whether a resulting private limited company may commence operations after filing a demerger application but before tribunal approval. The operative point: commencement of business arising from the demerger is contingent on sanction of the NCLT; filing alone is insufficient.