Most of what decides a transaction happens before signing: the structure chosen, what the diligence finds, and how the documents divide risk between buyer and seller. As mergers and acquisitions lawyers we advise buyers, sellers, promoters, joint venture partners and investors through each of those stages, and on the corporate, foreign exchange and competition approvals a deal may need.
Deal structure and legal due diligence
The first question is the form of the deal: a purchase of shares, a transfer of a business as a going concern for a lump sum (a slump sale), a purchase of selected assets, a merger or demerger, or a fresh issue of shares to an investor. Each form has different consequences for stamp duty, tax, employees, contracts that need a counterparty's consent, and licences that do not move with the business. Legal due diligence then tests the target against the chosen structure, usually covering:
- title to shares, land and other key assets, and any charges over them
- material contracts, change-of-control clauses and the consents they require
- licences, environmental consents and other regulatory approvals
- litigation, tax demands and contingent liabilities
- employment terms and compliance under the labour codes
- related-party dealings and exposure under anti-corruption law
Share purchase and joint venture agreements
A share purchase or share subscription agreement records the price and how it adjusts, conditions precedent, representations and warranties, indemnities and the limits on claims. The shareholders' agreement governs what follows completion: board seats, reserved matters, information rights, transfer restrictions, tag-along and drag-along rights, and exit. Rights over the transfer of shares are also written into the articles of association, because a restriction the articles do not contain may not bind the company.
A joint venture agreement raises its own issues: capital commitments and further funding, how deadlock is broken, non-compete undertakings drafted with Section 27 of the Indian Contract Act, 1872 in mind, and the terms on which one partner may buy the other out. Disputes are usually referred to arbitration, and the seat and rules are settled with our arbitration practice.
Private equity investment in India
Private equity and venture investors generally subscribe to equity shares, or to compulsorily convertible preference shares or debentures, which count as equity for a foreign investor. An optionally convertible instrument issued to a non-resident is treated as external commercial borrowing instead. Under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, pricing guidelines apply to issues and transfers, and a put option cannot promise a foreign investor an assured exit price.
For a foreign investor we check the sectoral cap, whether the automatic route is available, and whether Press Note 3 of 2020 requires government approval because the investor or its beneficial owner is from a country sharing a land border with India. Government-route proposals are filed on the Foreign Investment Facilitation Portal, and the investment is then reported to the Reserve Bank of India.
Mergers, schemes and approvals
Mergers and demergers usually proceed as a scheme of arrangement under Sections 230 to 232 of the Companies Act, 2013. The National Company Law Tribunal directs meetings of shareholders and creditors or dispenses with them, notice goes to regulators such as the income-tax authorities and the Registrar of Companies, and the Tribunal sanctions the scheme after hearing objections. Companies registered in Chhattisgarh come before the NCLT's Cuttack Bench.
Section 233 offers a fast-track route for specified classes, including small companies and a holding company merging with its wholly owned subsidiary, confirmed by the Regional Director instead of the Tribunal. Larger deals may also need approval from the Competition Commission of India before completion, which our competition practice handles, and a listed target brings in the takeover regulations covered under capital markets and securities.
To discuss a proposed transaction, you can reach the firm through the contact page.
What the practice handles
- Deal structuring for share purchases, slump sales, asset purchases, mergers and demergers
- Legal due diligence, with red-flag or full reports
- Share purchase, share subscription and business transfer agreements
- Shareholders' agreements and matching changes to articles of association
- Joint venture agreements, including funding, deadlock and exit provisions
- Private equity and venture capital investments, for investors or for founders and promoters
- Schemes of merger, amalgamation and demerger before the NCLT, and fast-track mergers under Section 233
- FDI structuring, government-route applications and reporting to the Reserve Bank
- Competition Commission filings for notifiable combinations
- Completion steps, including board changes, statutory filings and contract novations
Where these matters are heard
- National Company Law Tribunal, Cuttack Bench (for companies registered in Chhattisgarh), and the NCLAT on appeal
- Regional Director, Ministry of Corporate Affairs, for fast-track mergers
- Competition Commission of India, for combinations
- Reserve Bank of India, authorised dealer banks and the concerned ministry, for foreign investment
- Arbitral tribunals under joint venture and shareholders' agreements
Questions about M&A, Joint Ventures & Private Equity
What is the difference between a share purchase and a slump sale?
In a share purchase the buyer acquires the company itself, with its history, liabilities, licences and contracts intact. In a slump sale the seller transfers a business undertaking as a going concern for a lump sum, and the buyer takes only what is transferred. Contracts, licences and employees then have to move across, often with consents, and the tax and stamp duty treatment differs.
What does legal due diligence cover?
It reviews the target's title to shares and assets, material contracts, licences and approvals, litigation, tax exposure, employment and regulatory compliance. The findings shape the price, the conditions precedent, the warranties and any specific indemnities, and sometimes the structure itself. A red-flag report covers only the issues that affect the deal; a full report describes each area in detail.
Can a shareholders' agreement restrict the transfer of shares?
Yes. A private company's articles must restrict the transfer of its shares, and for a public company the Companies Act, 2013 treats a contract between shareholders about the transfer of securities as enforceable as a contract. Rights of first refusal, tag-along and drag-along rights should still be written into the articles as well, because a restriction the articles do not contain may not bind the company.
When is a fast-track merger available?
Section 233 of the Companies Act, 2013 allows specified classes, including small companies and a holding company with its wholly owned subsidiary, to merge without a Tribunal hearing. The scheme needs the approval of members holding at least 90% of the total number of shares and of creditors representing nine-tenths in value. The Regional Director then confirms it, or refers it to the NCLT.
Can part of the price be deferred when a foreign investor buys shares?
Yes, within limits. Under the Non-debt Instruments Rules, 2019, up to 25% of the total consideration in a transfer between a resident and a non-resident may be paid on a deferred basis, held in escrow, or covered by an indemnity from the seller, for up to eighteen months. Pricing guidelines apply to the whole consideration, and the transfer is reported to the Reserve Bank.
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This page describes the law in general terms as of 24 September 2026. It is not legal advice. The outcome of any matter depends on its facts, and the firm does not guarantee results.
