In case two companies are having a merger or amalgamation, then in that case the question which arise is what would happen to the Trust. Here is the answer to the question:-
Closure of Trust of amalgamating companies
- While amalgamation of companies, the new company can have only one Gratuity Trust. So the other Gratuity Trust needs to be closed. In case of amalgamation, all the Gratuity Trust needs to be closed. The new company would have a new Gratuity Trust
- Amalgamation of the fund with another fund shall require the prior approval of the Chief Commissioner or Commissioner
- The employer should make necessary arrangements for the payment of benefits or transfer the benefit amount with the new fund if the employee exist in the new company
Intimation to Income Tax for inclusion in main gratuity trust of amalgamated companies
- All the amalgamating companies need to intimate their jurisdiction at Income Tax office regarding merger in main trust
Intimation to Insurance Companies for transfer of employees
- Company need to intimate Insurance companies that the employees are transferred to the new company’s Gratuity Trust
- Otherwise, the employer need to make specific arrangements for the payment of Gratuity to employees
Income Tax Approval for Deed of Variation
- Deed of Variation needs to be approved by Income Tax Department
- Similarly, the Deed of Variation for inclusion in main gratuity trust of amalgamated companies needs to be approved by Income Tax Department.
Data Requirements
- Copied Financial Statement of previous year of all the companies which are going to be merged or amalgamated
- High court or Supreme court order of merger or amalgamation.
- Trust Master data of both the Trust
- Trust latest Income Tax Return of both the Trust.
Easy Accounting will study the case of merger or amalgamation will advice you with the best course of action.
For any further information, kindly get in touch with the below mentioned details:- <br/>
Contact :- 9920295099/8779413746 <br/>
Email :- info@easyaccounting.co.in <br/>
Easy Accounting and Outsourcing Pvt Ltd. <br/>
307/310, 3rd Floor, D Wing , Shiv Ashish Building , Plot No. 66, S.V. Road , Andheri (W), Mumbai- 400058