New Delhi, September 4, 2025:

The Ministry of Corporate Affairs (MCA) has issued a notification (G.S.R. 603(E)) amending the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 to further streamline the framework for fast-track mergers (FTM) under Section 233 of the Companies Act, 2013. These changes open new opportunities for companies to restructure with greater ease. At Lal Ghai & Associates (LGA), we closely track such regulatory updates to help businesses and start-ups effectively navigate corporate laws and compliances.

Key Highlights of the Amendment

1. Wider Scope of Fast Track Mergers

The amendment expands the categories of companies eligible for fast-track mergers. Now, the following combinations are covered:

• Small companies and start-up companies.
• Unlisted Companies with one or more unlisted companies, provided:
  • Aggregate outstanding loans, debentures, or deposits do not exceed ₹200 crore; and
  • There is no default in repayment obligations.
• Holding and subsidiary companies (listed or unlisted), except where the transferor company is listed.
• Inter-se mergers among subsidiaries of the same holding company, if the transferor company is not listed.
• Merger of a foreign holding company (incorporated outside India) with its Indian wholly-owned subsidiary.

2. Strengthened Regulatory Oversight

• Notices inviting objections to a scheme must be filed in Form CAA-9 and sent not only to the Registrar and Official Liquidator but also to sectoral regulators (RBI, SEBI, IRDAI, PFRDA) and concerned stock exchanges (in case of listed companies).
• Objections or suggestions must be filed within 30 days.

3. Solvency and Auditor Certification

• Companies undertaking FTM must file a Declaration of Solvency in Form CAA-10.
• Additionally, an auditor’s certificate confirming that the company satisfies the prescribed conditions must be submitted in Form CAA-10A, along with a copy of the approved scheme as referred to in Section 233(2) of the Act.

4. Filing and Approvals

• After members and creditors approve the scheme, the transferee company must file Form CAA-11 with the Central Government, Registrar, and Official Liquidator within 15 days of the meeting of members and creditors.
• The Central Government will issue the final confirmation order in Form CAA-12.

5. Extension to Divisions and Transfers

The provisions of Rule 25 are extended to schemes of division or transfer of undertakings under Section 232(1)(b), with flexibility for the Central Government to incorporate conditions under Section 232(3).

Implications of the Amendment

• Ease of Doing Business: More corporate structures, including start-ups and foreign holding–Indian subsidiary combinations, can now take advantage of the simplified FTM route.
• Regulatory Safeguards: Enhanced oversight by regulators and stricter solvency checks ensure protection of stakeholders.
• Faster Approvals: By reducing reliance on NCLT for eligible categories, companies can achieve restructuring more efficiently.

Before vs. After: Key Differences in Fast Track Mergers

Aspect	Earlier Provisions	Amended Provisions (2025)
Eligible Companies	Only mergers between: (a) two or more small companies; (b) holding & wholly-owned subsidiary.	Broader scope: (i) small & start-up companies; (ii) unlisted companies (subject to ₹200 crore cap on loans/deposits & no defaults); (iii) holding & subsidiary (except where transferor is listed); (iv) inter-se subsidiaries (if transferor is not listed); (v) foreign holding with Indian WOS.
Regulatory Notices	Form CAA-9 notice sent to Registrar & Official Liquidator.	Form CAA-9 to be filed with Registrar, Official Liquidator, sectoral regulators (RBI, SEBI, IRDAI, PFRDA), and concerned stock exchanges (for listed Cos).
Solvency Requirement	Declaration of Solvency in Form CAA-10.	Declaration of Solvency in Form CAA-10 plus Auditor’s Certificate in Form CAA-10A confirming compliance with Section 233 conditions.
Approval Process	Transferee to file Form CAA-11 with Central Govt. & authorities; order issued in Form CAA-12.	Same process retained, but timelines tightened – filing required within 15 days of members/creditors meeting.
Scope of Schemes	Limited to mergers of eligible companies.	Extended to division or transfer of undertakings under Section 232(1)(b), with power for Central Govt. to impose conditions under Section 232(3).

This amendment marks a significant step in broadening the scope and flexibility of fast-track mergers in India. By balancing speed with safeguards, the MCA aims to promote corporate restructuring while protecting creditors, investors, and other stakeholders. At Lal Ghai & Associates (LGA), our expertise in mergers, acquisitions, and corporate restructuring ensures that businesses can leverage these reforms for faster, compliant, and efficient growth.