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Homework answers / question archive / The following is an essential pre-requisite for a transaction to constitute a demerger under Indian law: (a) The entire assets and property of the demerged company, immediately before the demerger, becomes the property of the resulting company by virtue of the demerger

The following is an essential pre-requisite for a transaction to constitute a demerger under Indian law: (a) The entire assets and property of the demerged company, immediately before the demerger, becomes the property of the resulting company by virtue of the demerger

Accounting

The following is an essential pre-requisite for a transaction to constitute a demerger under Indian law:

(a) The entire assets and property of the demerged company, immediately before the demerger,

becomes the property of the resulting company by virtue of the demerger. (b) All the liabilities of the demerged company, immediately before the demerger, becomes the

property of the resulting company by virtue of the demerger.

(c) The transfer of assets and liabilities is at values appearing in its books of account immediately

before the demerger.

(d) The resultant company issues, in consideration of the demerger, its shares to the shareholders of the demerged company on a proportionate basis.

(e) The shareholders holding not less than three-fourths in value of the shares in the demerged

company become shareholders of the resulting company by virtue of the demerger.

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