MCA Expands Fast-Track Merger Regime, Streamlining Corporate Restructuring

The Ministry of Corporate Affairs(MCA) has significantly broadened the scope of the fast-track merger process under Section 233 of the Companies Act, 2013.Vide a notification dated September 4, 2025, which amends the Companies (Compromises, Arrangements and Amalgamations) Rules,the government has expanded eligibility for this streamlined route.

This strategic shift aims to enhance the ease of doing business and reduce the procedural burden on regulatory bodies, particularly the National Company Law Tribunal (NCLT).The amendment provides significant new opportunities for corporate groups and unlisted companies by offering a more time- and cost-effective mechanism for restructuring.

The Traditional Framework vs. The Fast-Track Route

Traditionally, this process involves a complex, court-driven procedure requiring approvals and oversight from multiple regulatory bodies, including the NCLT, the Competition Commission ofIndia (CCI), the Reserve Bank of India (RBI), and the Securities and ExchangeBoard of India (SEBI).

The fast-track mechanism underSection 233 was introduced as an alternative to this conventional NCLT-driven process ,offering a faster pathway primarily for small companies and simple intra-group mergers.The September 2025 notification, issued by the MCA under its rule-making power in Section 469 of the Companies Act, 2013 , has now materially expanded the scope of entities that can utilise this efficient route.

Key Amendments: Who is Now Eligible?

The 2025 amendment widens the eligibility criteria for the fast-track merger process. The regime now permits mergers between the following classes of companies:

·       Two or more unlisted companies, provided they do not have outstanding loans exceeding ₹200 crore and have never defaulted on anyloan repayments.

·       Subsidiaries of the same holding company.

·       A holding company (whether listed or unlisted) and its subsidiary or subsidiaries(whether listed or unlisted).

This expansion is a significant boon for corporate groups, facilitating internal reorganizations that were previously more complex, as well as for unlisted companies seeking consolidation without extensive NCLT scrutiny.

Procedural Requirements and New Filings

In place of the traditional NCLT approval process, Section 233 mandates a set of specific compliances and filings to ensure transparency and regulatory oversight. The 2025 rules introduce and clarify several key forms to be filed with the concerned authorities:

• Form No. CAA 10: A declaration of insolvency to be filed by the merging companies.
• Form No. CAA 10A: A newly introduced requirement for a certificate from the auditor approving the merger scheme.
• Form No. CAA 11: The statutory notice of the scheme's approval (by members and creditors) filed with the Central Government, Registrar of Companies, and the Official Liquidator.
• Form No. CAA 12: A confirmation form filed by both the transferor and transferee companies regarding the approved scheme.

This digitised, form-based framework aims to streamline monitoring, improve accessibility, and ensure all mergers under this route are compliant.

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