Corporate Actions & Structural Shifts Heat-Map

The transactions that change a company's shape, and the points at which the board carries the risk. Each head is a working checklist, not an exhaustive statement of law. Checked against law as at September 2026.

Buyback Solvency

• 25% cap: Is the buyback within 25% of paid-up capital and free reserves in aggregate?
• Solvency declaration (SH-9): Have at least two directors, including the Managing Director, affirmed that the company will not be rendered insolvent within a year?
• Post-buyback debt-equity: Will secured and unsecured debt to paid-up capital plus free reserves stay at or below 2:1?
• Physical destruction: Are the share certificates extinguished and physically destroyed within seven days of completion?

*Watch: the Corporate Laws (Amendment) Bill, 2026, on which a Parliamentary committee report is already filed, proposes replacing the SH-9 affidavit with a self-declaration and permitting two buybacks a year for certain companies. Not yet law; the affidavit-based, once-a-year regime above still governs.*

Rights Issue against Private Placement

• Speed of capital: If speed is the driver, does the rights issue follow the fast-track route?
• Valuation requirement: For a private placement (PAS-3), is a registered valuer's report attached? It is not mandatory for a rights issue to existing shareholders.
• Renunciation: Does the offer letter state the shareholder's right to renounce in favour of a third party?
• Separate bank account: Are application monies held in a scheduled bank and left untouched until the return of allotment is filed?

Valuation Report Scrutiny

• Method suitability: Net asset value, discounted cash flow or market multiple - is the method chosen appropriate to the industry?
• Caveats and limitations: Are the valuer's assumptions realistic, or quietly optimistic?
• Registered valuer: Is the valuer registered with the IBBI?
• Board review: Did the board critically challenge the valuation, or merely take it on record?

Scheme of Arrangement

*Mergers and demergers.*

• Appointed date against effective date: Is the appointed date clearly defined for accounting purposes?
• NCLT timeline: Are the first motion and second motion timelines mapped?
• Creditor objections: Have no-objections been obtained from creditors representing at least 90% in value, to seek a meeting waiver?
• Notice to regulators: Have notices gone to the ROC, Income Tax and, where applicable, SEBI and the CCI?

Pre-packaged Insolvency (PPIRP)

• MSME status: Does the company hold a valid Udyam registration?
• Special resolution: Have shareholders approved initiation by a 75% majority?
• Base resolution plan: Has management prepared a plan that does not impair operational creditors?
• Board declaration: Is there a declaration that the company is not being liquidated to defraud anyone?

Reduction of Share Capital

• Articles authorisation: Do the articles specifically permit a reduction of capital?
• Creditor protection: Is there a plan to pay dissenting creditors or furnish a bank guarantee for their dues?
• Accounting treatment: Has the statutory auditor certified that the treatment accords with accounting standards?
• NCLT order: Is the order filed with the ROC in Form INC-28 to make the reduction effective?

Fast Track Mergers (Section 233)

• Eligibility: Is the merger between two small companies, or a holding company and its wholly owned subsidiary?
• Solvency statement (CAA-10): Have both companies filed a statement of solvency with the Regional Director?
• Transferee capital: Does the transferee have the authorised capital to issue shares to the transferor's members?
• RD approval: With no objection from the RD or ROC, the merger proceeds without NCLT intervention.

*Corrected, September 2026: the small company thresholds that decide eligibility here are proposed to rise substantially under the pending Corporate Laws (Amendment) Bill, 2026. A merger structured today around narrow eligibility may qualify for the simpler route once the Bill is notified - worth timing around where there is flexibility.*

Allotment of Securities

• PAS-3 timeline: Is allotment completed within 60 days of receiving application money?
• Refund liability: If not, is the money refunded within 15 days, failing which interest runs at 12%?
• Share certificates: Are they issued within two months of allotment?
• Stamp duty: Has duty been paid through the Stock Holding Corporation or the relevant state portal?

Debenture Trustee Oversight

• Trustee agreement: Signed before the prospectus or offer letter is issued?
• Asset cover: Is a quarterly auditor's certificate obtained confirming the agreed asset cover is maintained?
• Redemption reserve: Is the debenture redemption reserve created out of profits?
• Trust deed: Executed in Form SH-12 within three months of closure of the issue?

Stub-Period Financials

• Audit level: For an M&A process, are the stub-period financials audited, or only limited-reviewed?
• Material changes: Is any material change in financial position between the balance sheet date and the meeting disclosed?
• Tax losses: Are continuity of business and shareholding tested so carried-forward losses survive?