Government Introduces Draft De Minimis Rules For Business Deals
These rules aim to simplify the process for smaller business transactions, giving them a pass from strict regulatory checks.
The Government released on Monday the draft De Minimis Rules, 2024, setting limits for business deals like acquisitions, takeovers, mergers or amalgamations.
These rules state that the value of assets in these deals should not exceed Rs 450 crore and the turnover should stay under Rs 1,250 crore. If deals fall within these limits, they're considered 'de minimis', meaning they're too small to need close scrutiny under the Competition Act.
These newly set limits will last for two years. Even if only a part of a business is involved in a deal, its specific value will be considered when calculating these limits.
The notification on the target size, in terms of asset/turnover, is to account for the ground realities of change in Wholesale Price Index, exchange rates and other similar factors, according to KK Sharma, partner at Singhania & Co.
In essence, the draft De Minimis Rules, 2024, provide clear guidelines and thresholds for certain business transactions, offering exemptions from stringent regulatory oversight.
