Demerger Of Company

Introduction of Demerger

A demerger also known as a spin-off, is a restructuring mechanism where a corporate entity is split into separate parts which become new legal entities. The legal entities form their own separate identity with their distinct assets, liabilities, and functions. 

In a demerger, the parent corporation transfers ownership of the subsidiary or business unit to its current shareholders, essentially separating the two into separate legal organisations. These recently established organisations function as autonomous businesses, frequently with their management groups and boards of directors.

Ahlawat & Associates is one of the top law firms for demerger advisory. We have a splendid track record of providing services like amalgamation and demerger both in the domestic market as well as internationally. We have exemplary associates who are well versed with the recent regulations in demerger law and hence we provide innovative solutions to your problems. We help in focusing on your core operations by spinning off the subsidiaries and unlocking the potential of your organisation. We ensure that all compliances and regulatory requirements are followed so that the demerger can take place without any issues. 

Legal Framework for Demerger

The Companies Act 2013 provides the legal framework for demergers. The provisions deal with the powers and functions of the National Company Law Tribunal to sanction schemes of arrangement or compromise. It also outlines the factors that have to be taken into consideration for a demerger. 

Ahlawat & Associates is one of the finest law firms which helps with the demergers of a company. We provide services like providing the legal framework for demerger schemes, including the transfer of assets, liabilities, and other stakeholders to the newly created entity. We also provide schemes for the formation and administration of the newly formed body corporate. 

We ensure that the books and papers of the demerged company are preserved so that a continuous record is kept of the records and documents. We also address the liability of the offenses committed before the demerger. We help clarify the extent of liability and responsibility for the offenses committed.

We also coordinate the entire process with Serious Fraud Investigation Office (SFIO) in conducting an investigation of any offense committed during the demerger process. 

We ensure that all compliances are in place and your newly formed company is ready to function. 

Our Approach to Demerger

Ahlawat & Associates focuses on efficiency and integrity as our core values which makes it one of the best legal firms for the demerger of companies. 

  • With value creation as our sole intention, we help demerging companies get a clearer understanding of the potential of demerged assets which leads to greater profit. 
  • We help create an environment of transparency between the client and its newly separated entities attracting more investors and enhancing shareholder value. 
  • We ensure there is sufficient risk mitigation and any dispute arising out of a demerger is contained within its specific units and does not affect the entire organisation. 
  • We ensure there is improved governance and accountability by placing management at each entity separate from its parent organisation. 
  • We also take care of the rigorous compliances which are needed at the time of a demerger. 
  • We help streamline the organisational structures, reporting systems, and financial statements preventing a concentration of power and clarity to stakeholders. 
counter 1


Years of Experience

counter 1


Clients Served

counter 1


Deal Value Handled

counter 1


Expert Professionals

Experienced Team

A&A is among the top corporate law firms in India. At A&A, we believe that we are as good as our team, Our principle has guided us to ensure that we have the best corporate lawyers in India based at our main offices while the leading corporate lawyers in other parts of the world run our various practices across the nation, thus ensuring optimum management and service of even the most complex transactions. It is due to our standards of professional responsibility when dealing with our clients and various matters, which we stringently abide by that has enabled us to qualify as one of the reputed corporate law firms in India.

Industry Experience

Whilst A&A commercial law services has been able to cater to legal needs pan India as well as globally, its main founding office and headquarters is in Delhi and it is due to this foothold. A&A corporate lawyer in India has played a vital role in providing advice to the government on various legal and policy-related issues and is amongst the few corporate law firms in India to have the experience and optimal understanding of interpretation and drafting of policy matters.

Client-Centric Approach

A&A adopts an approach that demands the highest levels of knowledge, technical skill and service delivery allowing us to provide accurate, reliable, timely, and cost-effective advice while maintaining international standards of excellence and create a bespoke approach for every client and their business. Our commercial law solicitors unique perspective of working on our client’s matters as a critical part of their team allows us to address their problems like our own. We believe that each client comes with different requirements and concerns – and we work tirelessly to achieve their goals and pursue their objectives.


We make sure that our fee structure and the legal costs involved are very transparent and predictable for our clients. We believe that client relationships are based on trust and a sense of common purpose and we never falter on our promise making us one of the best corporate law firms in India. Our priority has been to deliver the best legal & business solutions and our fee arrangements are tailored to the needs of the client, the client’s goals, and the nature of the matter.

Frequently Asked Questions

  1. What are Demerger laws in India?

    Demerger laws in India refer to the legal provisions and regulations that govern the process of demerger, which is the corporate restructuring strategy involving the separation of one company into two or more independent entities. The demerger laws in India primarily revolve around the provisions specified in the Companies Act, 2013, and the regulations set by the Securities and Exchange Board of India (SEBI). Here are some key points related to demerger laws in India:

    1. Companies Act, 2013
    2. Approval of Board of Directors
    3. Preparation of Demerger Scheme
    4. Approval from Shareholders and Creditors
    5. Approval from National Company Law Tribunal (NCLT)
    6. Transfer of Assets and Liabilities
    7. Compliance with SEBI Regulations
  2. Process for Demerger of Company?

    The process for demerger of a company involves several steps and requires compliance with legal and regulatory requirements. Here is a general overview of the process:

    1. Preliminary Evaluation
    2. Demerger Proposal
    3. Board and Shareholder Approval
    4. Demerger Scheme
    5. Approval from National Company Law Tribunal (NCLT)
    6. Documentation and Filings
    7. Transfer of Assets and Liabilities
    8. Compliance and Notifications
    9. Post-Demerger Activities


Contact Us Now

Cookies Consent

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below. Read more...

Cookies Consent

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below. Read more...