Amalgamation and migration under Mauritius Law

This article endeavours to highlight the often forgotten concepts of amalgamation and migration of companies which underlie some fundamental M&A transactions.

Amalgamation

Definition

• No statutory definition;
• Consensus that it refers to merger and consolidation of companies into a single entity;
• The new entity acquires the assets and liabilities of each amalgamating company;
• Two domestic companies may amalgamate more freely than one domestic company and a company incorporated abroad;
• One or more Authorised Company(ies) is/are expressly authorised to amalgamate with a company which is not incorporated in Mauritius and this includes the scenario where one of the constituent companies is a parent company and the other constituent companies are subsidiary companies, provided the merger is authorised by the laws of the foreign jurisdiction.

Governing Law

Companies Act  2001 (as amended) (Companies Act)

Part XVI:  sections 244-252

Substantive provisions

Two or more companies may amalgamate, and continue as one company, which may be one of the amalgamating companies or a new company.

Requirements to be satisfied

An application is lodged with the Registrar of Companies (RoC) with the following documents in support:

Merger Involving two Mauritian companies:

• Amalgamation proposal which sets out the terms of the amalgamation.
• The board of directors of each amalgamating company must resolve that the amalgamation is in the best interests of the company and that, immediately after the amalgamation becomes effective, it will satisfy the solvency test.
• Directors who vote in favour of the resolution must sign a certificate stating the above conditions are satisfied.
• The board of directors of each company should, not less than 28 days before the amalgamation is proposed to take effect:

1. Send to each shareholder all relevant documents including a copy of the amalgamation proposal and to every secured creditor of the company a copy of the amalgamation proposal;
2. Give public notice of the  proposed amalgamation.

• The amalgamation proposal must be approved by the shareholders of each company.
• Constitutional documents must be delivered to the RoC for registration which includes the approved amalgamation proposal.

Merger Involving an Authorised Company and a foreign company:

• The foreign company must provide evidence that it has complied with the laws of its jurisdiction of incorporation on mergers to the RoC.
• The Authorised Company must provide evidence that it has complied with the applicable provisions of the Companies Act.

Legal Effects

Where the amalgamated company is incorporated in Mauritius:

• The amalgamation is effective on the date shown in the certificate of amalgamation issued by the RoC.
• The amalgamated company shall continue to be liable for all the liabilities and obligations of each of the amalgamating companies and all pending proceedings by, or against, an amalgamating company shall be continued by, or against, the amalgamated company.

Where the amalgamated company is incorporated outside Mauritius:

• The amalgamation is effective in accordance with the relevant laws of the foreign jurisdiction.

Migration

Definition

• Statutory definition as ‘continuation’.
• Transfer of a company’s registration from abroad to Mauritius.
• No winding-up is involved and no new legal entity is created.
• Upon successful transfer of registration the foreign company is treated as if it had been incorporated under the Companies Act.

Governing Law

Companies Act  2001 (as amended) (Companies Act)

Part XXV: sections 296-300

Substantive Provisions

A company incorporated under the laws of any country other than Mauritius, may, where it is so authorised by the laws of that country, apply to the Mauritian Registrar of Companies (‘RoC’) to be registered as, and continue as, a company in Mauritius as if it had been incorporated in Mauritius under the Companies Act.

Requirements to be satisfied

An application is made to the RoC with the following documents in support:

• certified copy of foreign company’s certificate of incorporation or other document which confirms its incorporation;
• certified copy of foreign company’s constitution;
• certified copy of resolutions of foreign company authorising its continuation of registration in Mauritius;
• certified copy of a statement of the charges on foreign company’s assets;
• certified copy of document which confirms that the foreign company is in good standing in its country of incorporation and any other country in which it reckons a significant activity;
• a confirmation setting out the matters highlighted at ** below;
• a confirmation that the foreign company would, immediately after being registered by the RoC, satisfy the solvency test; and
• any other documents which the RoC deems necessary.

** The foreign company’s application must be supported with a confirmation, ideally by a legal practitioner entitled to practice in its jurisdiction of incorporation, that the following conditions are satisfied:

• the foreign company is authorised to transfer its incorporation under the jurisdiction in which it was incorporated;
• the foreign company has complied with the requirements of its laws of incorporation in relation to the transfer of its incorporation;
• a resolution approved by 75% of its shareholders entitled to vote and voting in person or by proxy at a meeting and a notice specifying the intention to transfer the foreign company’s incorporation was given to the shareholders at least 21 days before the meeting. This is required where the laws of incorporation of the foreign company does not require its shareholders or a specified proportion of them to consent to the transfer of the foreign company’s incorporation;
• the foreign company is not in the process of being wound up or liquidated;
• neither a receiver not a manager has been appointed in relation to the property of the foreign company;
• there is no scheme or order in force in relation to the foreign company by which the rights of creditors have been either suspended or restricted.

Legal Effects

A certificate of registration of a company issued by the RoC is conclusive evidence that all the requirements of the Companies Act have been met. Furthermore, it serves as a confirmation that the company is registered under the Companies Act as from the date disclosed in the certificate.