A Guide to Investing in Trinidad and Tobago (2011) - Ministry of ...

to create a union of companies for operational reasons.
In some situations it can also facilitate effective
tax planning.
Procedure required for amalgamation
The first step in carrying out an amalgamation is to
draw up an agreement incorporating the terms and
means of effecting the amalgamation including the
form of the proposed by-laws. It is desirable that the
by-laws of one of the amalgamation companies be
adopted as the by-laws of the amalgamated entity.
After the amalgamation agreement has been drawn
up, it must be approved by the Boards of Directors of
the amalgamating companies and must be submitted
to the shareholders of each of the amalgamating
companies for approval. If the shareholders approve
of the amalgamation, Articles of Amalgamation in the
prescribed form must be filed with the Registry accompanied
by a declaration of solvency, particulars of
directors and the registered office.
A holding company which seeks to amalgamate with
one or more of its wholly-owned subsidiaries is not
required to prepare and submit an amalgamation
agreement for the approval of shareholders if:
• The directors of each company approve the
amalgamation.
• The resolutions of each Board provide that:
- The shares of each amalgamating subsidiary
will be cancelled without repayment of capital
- The articles of amalgamation will be the same
as the articles of incorporation of the holding
company
- No shares or debentures will be issued by the
amalgamated company in connection with
the amalgamation.
A fairly similar short-form mechanism is available to
enable two or more wholly-owned subsidiaries of a
common parent body to amalgamate. A director or
officer of each amalgamating company is required to
make a statutory declaration establishing to the satisfaction
of the Registrar that:
• Each amalgamating company is and the amalgamated
company will be able to pay its liabilities
as they become due.
• The realisable value of the amalgamated company’s
assets will not be less than the aggregate
of its liabilities and stated capital of all classes.
• Either no creditor will be prejudiced by the amalgamation,
or that adequate notice has been given
to all known creditors and no creditor objects
except on grounds that are frivolous or vexatious.
Objections by minority shareholder to an
amalgamation
If a company resolves to effect an amalgamation, a
shareholder of any class of shares is entitled to dissent.
He does so by sending a written dissent to the
company at or prior to the meeting convened to effect
the amalgamation. A dissenting shareholder is
entitled to be paid the fair value of the shares held
by him as of the day prior to the resolution approving
the amalgamation without taking into account any
change in value attributable to the anticipated adoption
of the amalgamation resolution. The company is
required to make an offer to pay for the shares of a
dissenting shareholder not later than seven (7) days
after the resolution adopting the amalgamation at a
price considered by the directors to be the fair value
of the shares. If this offer is not accepted, either party
may apply to the court for an order to fix the fair value
of the shares.
A dissenting shareholder who makes a demand for
payment of the fair value of his shares ceases to have
any rights as a shareholder other than the right to be
paid such fair value of his shares. However, this does
not apply if he withdraws his notice of dissent or the
directors terminate the amalgamation agreement.
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