Abstract:
Adopting the New Zealand model, the Companies (Amendment) Act 2005 allows two or more companies to amalgamate, which is a fusion of the companies and the vesting of all their assets and liabilities in the amalgamated company, out of court. This provides an effective method of fusion which is not available hitherto due to the restrictive court practices under s 212. It however raises issues of rights of third parties and minority shareholders. This article explains what is involved in an amalgamation and argues that the provisions fail to provide adequate protection to unsecured creditors and shareholders of the amalgamating companies.