Bhumika Narang, Hidayatullah National Law University
ABSTRACT
This research paper looks extensively at corporate restructuring, primarily concentrating on mergers, compromises, and arrangements made in India under the Companies Act of 2013. The discourse delves into multiple facets of restructuring, highlighting the importance of accommodation, reorganization, and reconstruction. The necessity of corporate restructuring to improve productivity, distribute resources wisely, and realize economies of scale is a major issue that has been examined. The paper presents the differences between inorganic and organic restructuring and looks closely at organic restructuring. It specifically identifies three important types of organic restructuring: share capital reduction and employee stock option plans (ESOP). The study explores the intricacies of ESOP, highlighting its effect on business dynamics and its function in granting employees ownership interests. It also addresses share capital reduction, delving into the motivations for such actions, which include asset distribution, deficit correction, and readjusting the relationship between capital and assets. The 2013 Act is continuously emphasised as a progressive step that enhances the global competitiveness of Indian Corporate Law and encourages accountability and openness in corporate restructuring throughout the study paper. The study concludes by highlighting the 2013 Act's revolutionary effects on corporate restructuring and highlighting its contribution to promoting accountability and transparency in accordance with international norms. The mention of organic restructuring in particular highlights its importance within the larger context of corporate restructuring, including ESOPs, buybacks, and share capital reductions.
