Maharashtra a highly industrialised state has two broad categories of Industrial Land i.e. Freehold (Private) and Leasehold (Government). Maharashtra Industrial Development Corporation (MIDC) allots plot on 95 years of lease with conditions stipulated in the lease agreement. The lease of MIDC Plot can be transferred to a new lessee with prior concurrence of MIDC with or without Acquisition of a Company With MIDC Land.
However, in case there is a change in the management of the company (Share holders or director) , the MIDC approval must be taken after completion of the ROC formalities. The MIDC may also levy charges granting approval for change of the management in the company. Whenever there are transfer of shares of 50% or more in a company, the MIDC treats the same as a normal transfer case and levy the transfer charges accordingly i.e. differential premium as per the current policy. To know in detail about the transfer guidelines of MIDC and charges, please click here.
Acquisition of a Company With MIDC Land ( i.e. Company Takeover along with the assets which includes MIDC land) has following steps:
- Due Diligence and Search.
- Change of Manangement of the Company
- MIDC approval
1.Due Diligence & Search
Before transferring the share of the company to new shareholders and appointing new Directors in the company, the purchaser must carryout proper due diligence & search of the company, directors & Property which includes:-
- Reviewing the Memorandum of Association and Article of Association of the company
- ROC Search of the company to find out status of the company, charges & filing of returns etc. Also search of the directors to find the current status of each director.
- Physical verification of all company documents.
- Check for all compliance, licenses, permits and consents issued by various departments. Verification from the concerned departments if any notice was issued due to non compliance and the matter still remains unsettled.
- Publication of Notice in newspaper inviting claims & objections.
- Physical verification of all original Property documents.
- Search of property in Sub registrar office and obtaining Title report by advocate.
- Verification from Regional office of MIDC regarding charge on the property or there are any pending issues need to be settled.
2.Change of Management of the Company
Once Due diligence is done and the Purchaser is satisfied with the title of the company to the said property, the Purchaser may go ahead for the acquisition of the company. The Purchaser must take all adequate precautions to ensure that all current liabilities on the company and the property are cleared before taking over the company and making payment of the consideration amount to the seller. Transfer of shares can be completed in following steps:
- Shares and Assets valuation of the company to ascertain the value of each share of the company for proposed transfer.
- Preparation of draft Share Purchase Agreement..
- Execution of Share Purchase Agreement.
- Appointment of New Directors and Resignation of Old Director in ROC.
- Updating all statutory records for the transaction.
3. Obtaining MIDC Approval
After completion of ROC work, the new director of the company can apply to MIDC for change in management of company along with CA certificate and other requisite documents. MIDC levies transfer charges / premium for such transfers.
Our company ASCC can assist you for acquisition / transfer of any company along with the assets in a highly professional manner. In case you want to acquire any industrial property directly or want to acquire a company with its business / industrial assets you may get in touch with us. We would be happy to help you.
Ascent Supply Chain Consultants Pvt Ltd (ASCC)
406, Raheja Arcade
Sector -11, CBD Belapur
Navi Mumbai – 400614