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Options
-
It is a court-monitored settlement process between the company and its creditors.
Correct answer
- B
It is the settlement of legal succession within the promoter family after the demise of the promoter.
- C
It is the process of merging the subsidiaries with the holding company.
- D
It is basically an agreement of cooperation by all the companies in an industry.
Why this is the answer
Under Section 230 of the Companies Act 2013, a 'Scheme of Arrangement' allows a company to propose compromises or arrangements with its creditors or members. This process is subject to approval by the National Company Law Tribunal (NCLT), which ensures that the interests of all stakeholders are considered. The tribunal may order meetings between the company and its creditors or members to reach a formal arrangement. Options B, C, and D are incorrect because they describe specific corporate scenarios or general agreements, which do not capture the legal framework and court involvement specified under Section 230.
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