The Companies Act, 2013 has replaced the 1956 Act with respect to Merger & Acquisitions. The new act along with the rules, orders, notifications and circulars issued thereunder (as amended), enhanced disclosure norms, providing protection to investors and minorities thus making M&A transactions efficient.

The Indian Contract Act, 1872 (as amended), focuses on general principles that administer the contracts and how collection of damages could be incorporated in case of aa breach of the contract. It also provides for an exception of allocating specific relief in the form of specific performance of the contracts.

The Specific Relief Act, 1963 (as amended), lays down the remedies available to parties which have faced a civil or contractual breach of rights. It prescribes remedies available to private parties for breach of contract.

The Income Tax Act, 1961 (as amended), accommodates for various provisions that deal with the taxation of various categories of mergers and acquisitions. The Income Tax Act determines taxation-related considerations with respect to M&A in India, and to transactions which have cross-border elements. It also explains double taxation-avoidance treaties which also play an important role.

The Competition Act, 2002 (as amended), is fundamentally bound with M&A, as all mergers and acquisitions have to undergo the process of Competition Assessment under the admissible provisions of the Competition Act, 2002 and the associated regulations. The act also administers combinations (such as M&A) of companies and constrain the anti-competitive agreements, which have or are likely to have an definite adverse effect on the competition in India.

The Foreign Exchange Management Act, 1999 and the rules and regulations issued thereunder (as amended), provide the framework for mergers, amalgamations and arrangements between foreign and Indian companies, covering investment related information, covering both, inbound and outbound investments. The rules and regulations under FEMA, read together with the circulars, directions and rules issued by the RBI, collectively regulate foreign investment in India (the “Foreign Exchange Regulations”).

Various Central and State Government labour legislations also supervise employment-related matters (such as terms of service, payment of wages, working conditions, safety of the staff and workers, health and welfare of workers and others).

The Securities and Exchange board of India Act, 1992 and the rules and regulations issued thereunder (as amended), regulates the securities market in India which also includes acquisitions involving companies which are listed on stock exchanges in India. The SEBI Act, read together with the circulars, notifications, guidelines and directions issued by the SEBI, also lists in detail, substantial acquisition on shares and takeovers.

In addition to above mentioned regulations and rules, various sector-specific regulations may also be applicable in case of a standard M&A transaction in India depending on the parties involved.