Eligible Companies for Fast Track Mergers under the Companies Act, 2013

Eligible Companies for Fast Track Mergers under the Companies Act, 2013 . Mergers and amalgamations enable businesses to consolidate operations, simplify group structures, eliminate inactive entities, reduce compliance costs, acquire new capabilities and reorganise assets or liabilities. Ordinarily, such transactions require approval from the National Company Law Tribunal (NCLT) under Sections 230 to 232 of the Companies Act, 2013.
However, Section 233 of the Companies Act, 2013 provides a simplified Fast-Track Merger route for eligible companies, under which a scheme may be confirmed by the Central Government through the Regional Director without initially approaching the NCLT.
The scope of this mechanism was significantly expanded through the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, notified by the MCA vide G.S.R. 603(E) dated 4 September 2025. This amendment has made the fast-track route available to a wider range of companies, offering a faster and more cost-effective alternative to the traditional NCLT process.
What is a Fast-Track Merger?
A Fast-Track Merger is a simplified merger, amalgamation or eligible restructuring process governed by:

Section 233 of the Companies Act, 2013; and

Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

Unlike a conventional merger under Sections 230 to 232, an eligible company is not required to begin the process by filing an application before the NCLT. The scheme is instead examined and confirmed by the Regional Director on behalf of the Central Government, after considering the observations of the Registrar of Companies, Official Liquidator, sectoral regulators and other affected persons.
The process continues to require approval from the Board of Directors, members and creditors ) of the companies involved. Therefore, “fast-track” refers to a simplified regulatory route and not to an exemption from stakeholder approval, solvency verification, valuation or regulatory scrutiny.
Difference Between Merger and Amalgamation in India 
Companies Eligible for Fast-Track Merger
[As per Section 233 of the Companies Act, 2013 read with Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Regulations 2016: ]
(i) two or more start-up companies; or
(ii) one or more start-up company with one or more small company; or
(iii) one or more unlisted company, (not being a Section 8 Company) with other unlisted companies, (not being a Section 8 Company), 
where every company involved in the merger shall satisfy the following conditions:
(a) the aggregate of outstanding loans, debentures or deposits shall not exceed Rs. 200 crore, and
(b) has not defaulted in repayment of loans, debentures or deposits referred to in sub-clause (a) and at least a gap of 30 days have lapsed before issuing notice inviting objections or suggestions (in Form No. CAA 9), if any, from the Registrar and Official Liquidators  [referred to in section 233(1)(a) of the Act] and on the date of filing of scheme under Section 233(2) of the Act and
(c) a certificate from the auditor of the Company that the Company meets the conditions referred to in this clause shall be filed in Form No. CAA-10A along with the copy of the approved scheme referred to in Section 233(2) of the Act;
(iv) a holding company (listed or unlisted) and a subsidiary company (listed or unlisted):
Provided that this clause shall not apply where the transferor company or companies are listed;
(v) one or more subsidiary company of a holding company with one or more other subsidiary company of the same holding company where the transferor company or companies are not listed;
Learn through Illustration:-
Company 'D' is the subsidiary of Company 'C' and Company 'C' is the subsidiary of Company 'B' and in turn Company 'B' is the wholly owned subsidiary (WOS) of Company 'A'.
In this case Company 'B' is the WOS of Company 'A'. Company 'C' and Company 'D' are subsidiaries of the same holding company i.e., Company 'A'
Subject to the condition stated in the clause, schemes of merger or amalgamation or transfer or division between Company 'A', Company 'B', Company 'C' and Company 'D' or any combination thereof would be covered under this clause.
(vi) merger of the transferor foreign company incorporated outside India being a holding company with the transferee Indian company being its wholly owned subsidiary company incorporated in India referred to in rule 25A(5).
Procedure for Fast-Track Merger under Section 233
Step 1: Conduct preliminary due diligence
Before preparing the scheme, the companies should verify:

eligibility under Section 233 and Rule 25;

status as a small, start-up, unlisted, holding or subsidiary company;

listing status of the transferor company;

loan, debenture and deposit outstanding;

repayment defaults;

charges registered with the ROC;

creditor composition;

pending litigation and regulatory proceedings;

tax implications;

stamp-duty exposure;

sectoral approvals; and

restrictions contained in financing documents, shareholders’ agreements or other contracts.

Eligibility must be established for every company involved. A scheme cannot use Section 233 merely because the transferee company satisfies the prescribed conditions.
Step 2: Prepare the draft scheme
The companies must prepare a detailed scheme covering matters such as:

appointed date and effective date;

transfer of assets and liabilities;

treatment of employees;

continuation of legal proceedings;

cancellation or issue of shares;

share-exchange ratio, where applicable;

accounting treatment;

treatment of inter-company balances;

contracts, licences and statutory approvals;

tax treatment;

dissolution of the transferor company; and

conditions precedent to effectiveness.

The valuation and share-exchange ratio should be supported by a report from a registered valuer wherever applicable.
Step 3: Obtain approval of the Board of Directors
The Board of each company should approve the draft scheme and authorise the directors or officers to:

issue the prescribed notices;

file the declaration of solvency;

convene meetings of members and creditors;

make filings with the ROC and Regional Director;

respond to objections; and

complete the merger process.

Step 4: Issue notice in Form CAA-9
A notice of the proposed scheme must be issued in Form CAA-9, inviting objections or suggestions from:

the Registrar of Companies;

the Official Liquidator;

persons likely to be affected by the scheme;

the applicable sectoral regulator; and

the relevant stock exchange, where applicable.

Regulated companies must also serve the notice upon authorities such as the RBI, SEBI, IRDAI or PFRDA, as applicable. Objections or suggestions may be submitted within 30 days of the notice.
Step 5:  Obtain members’ approval
the objections and suggestions received pursuant to Notice given in Form CAA-9 are considered by the companies in their respective general meetings and the scheme is approved by the respective members or class of members at a general meeting holding at least ninety per cent. of the total number of shares 
Step 6: File declaration of solvency
Each company involved must file a declaration of solvency in Form CAA-10, as an attachment to Form GNL-1, before convening the meetings of members and creditors.
The directors must declare, after making a full inquiry into the affairs of the company, that:

the company is capable of meeting its liabilities as and when they fall due; and

the company will not be rendered insolvent within one year from the date of the declaration.

The declaration is supported by a statement of assets and liabilities and the auditor’s report on that statement.
For unlisted companies covered by the Rs.200 crore category, the statutory auditor must additionally issue the prescribed certificate in Form CAA-10A. The certificate accompanies the approved scheme filed under Section 233(2).
Step 7: Obtain creditors’ approval
The scheme must be approved by a majority representing at least nine-tenths in value of the creditors or class of creditors of each company.
Creditors may approve the scheme:

at a meeting convened by giving at least 21 days’ notice along with the scheme; or

through written consent.

The scheme should appropriately address secured creditors, unsecured creditors, debenture holders, deposit holders and contingent liabilities.
Step 8: File the approved scheme with the Regional Director
Within 15 days after the conclusion of the meetings of members and/or creditors, the transferee Company must file:

the approved scheme;

report of the result of each meeting;

registered valuer’s report;

prescribed declarations;

auditor’s certificate in Form CAA-10A, where applicable; and

other supporting documents.

The filing is made in Form CAA-11 as an attachment to Form RD-1, together with the prescribed fee.
Where the company is regulated by a sectoral regulator or connected with a stock exchange, a statement explaining how the objections or suggestions of the regulator or stock exchange have been addressed must also accompany the scheme.
Step 9: Examination by ROC, Official Liquidator and Regional Director
The ROC and Official Liquidator may submit their objections or suggestions to the Regional Director.
After examining the scheme and the observations received, the Regional Director may:

confirm the scheme in Form CAA-12; or

refer the scheme to the NCLT where it is considered contrary to public interest or prejudicial to creditors.

The absence of initial NCLT proceedings does not prevent the Regional Director from seeking Tribunal scrutiny where the circumstances require it.
Step 10: File the confirmation order
After confirmation, the Regional Director’s order must be filed with the jurisdictional Registrar of Companies in the prescribed manner.
The scheme becomes effective in accordance with the appointed date, effective date and conditions stated in the scheme and confirmation order.
Effect of Registration of Fast-Track Merger
Upon registration and effectiveness of the scheme:

the assets and liabilities of the transferor company vest in the transferee company;

charges over the transferor company’s property continue and become enforceable against the transferee company;

legal proceedings may continue by or against the transferee company;

the transferor company is dissolved without undergoing winding up;

employees, contracts and business arrangements are dealt with according to the scheme;

shares held by the transferee in the transferor company are cancelled or extinguished; and

the transferee company may be required to update its authorised share capital and pay the applicable differential filing fee after available set-off.

Fast-Track Merger versus Regular NCLT Merger

Particulars

Fast-Track Merger

Regular Merger

Governing provision

Section 233

Sections 230–232

Primary approving authority

Regional Director on behalf of Central Government

NCLT

Eligibility

Restricted to prescribed classes

Generally available to companies

Members’ approval

At least 90% of total number of shares

Statutory majority under Sections 230–232

Creditors’ approval

Nine-tenths in value

Statutory majority under Sections 230–232

Declaration of solvency

Mandatory

Not prescribed in the same manner for every scheme

NCLT involvement

Normally avoided but possible on reference

Mandatory

Relative process

Generally simpler and faster

More extensive Tribunal process

Advantages of Fast-Track Merger

Reduced dependence on NCLT proceedings: Eligible schemes can be processed by the Regional Director without commencing a full Tribunal proceeding, unless the matter is referred to the NCLT.

Lower restructuring cost: A simplified process may reduce litigation expenses, hearing-related costs and the administrative burden associated with an NCLT merger.

Efficient group consolidation: Holding companies can consolidate subsidiaries, fellow subsidiaries can be combined, and overlapping group entities can be rationalised more efficiently.

Greater flexibility for unlisted companies: The 2025 amendment allows a broader class of unlisted companies to undertake a fast-track merger even where they do not qualify as small companies or start-ups.

Support for demergers and business transfers: Eligible companies may use the framework to separate or transfer an undertaking, subject to compliance with the amended rules.

Better utilisation of professional expertise: Company Secretaries, Chartered Accountants, legal advisers, registered valuers and tax professionals can assist management in identifying suitable restructuring opportunities, preparing the scheme and coordinating regulatory approvals.

Role of Company Secretaries in Fast-Track Merger
The expansion of Section 233 creates a significant advisory responsibility on Company Secretaries. Their role may include:

examining eligibility under the Act and Rules;

conducting secretarial and regulatory due diligence;

drafting the scheme and Board documentation;

coordinating valuation and accounting reports;

preparing Forms CAA-9, CAA-10, CAA-10A and CAA-11;

filing GNL-1 and RD-1;

managing members’ and creditors’ approvals;

responding to the ROC, Official Liquidator and Regional Director;

coordinating with sectoral regulators; and

completing post-merger ROC compliances.

Instead of treating a merger merely as a statutory filing exercise, professionals can assist management in using corporate restructuring as a tool for inorganic growth, operational consolidation, succession planning and group simplification.
CCL Conclusions
By extending fast-track mergers to qualifying unlisted companies, non-wholly owned holding-subsidiary structures, fellow subsidiaries and eligible demergers, the MCA has made Section 233 relevant to a much wider segment of the corporate sector.
The amendment can help businesses consolidate group entities, reorganise undertakings and reduce unnecessary corporate layers through a comparatively efficient regulatory route. However, a Fast-Track Merger remains a detailed legal process requiring proper valuation, solvency assessment, stakeholder approval, regulatory consultation and accurate documentation.
Companies considering this route should conduct a comprehensive legal, financial, tax and regulatory evaluation before finalising the scheme.

Mergers and amalgamations enable businesses to consolidate operations, simplify group structures, eliminate inactive entities, reduce compliance costs, acquire new capabilities and reorganise assets or liabilities. Ordinarily, such transactions require approval from the National Company Law Tribunal (NCLT) under Sections 230 to 232 of the Companies Act, 2013.

However, Section 233 of the Companies Act, 2013 provides a simplified Fast-Track Merger route for eligible companies, under which a scheme may be confirmed by the Central Government through the Regional Director without initially approaching the NCLT.

The scope of this mechanism was significantly expanded through the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, notified by the MCA vide G.S.R. 603(E) dated 4 September 2025. This amendment has made the fast-track route available to a wider range of companies, offering a faster and more cost-effective alternative to the traditional NCLT process.

What is a Fast-Track Merger?

A Fast-Track Merger is a simplified merger, amalgamation or eligible restructuring process governed by:

Section 233 of the Companies Act, 2013; and
Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

The process continues to require approval from the Board of Directors, members and creditors ) of the companies involved. Therefore, “fast-track” refers to a simplified regulatory route and not to an exemption from stakeholder approval, solvency verification, valuation or regulatory scrutiny.

Difference Between Merger and Amalgamation in India

Companies Eligible for Fast-Track Merger

[As per Section 233 of the Companies Act, 2013 read with Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Regulations 2016: ]

(i) two or more start-up companies; or

(ii) one or more start-up company with one or more small company; or

(iii) one or more unlisted company, (not being a Section 8 Company) with other unlisted companies, (not being a Section 8 Company),

where every company involved in the merger shall satisfy the following conditions:

(a) the aggregate of outstanding loans, debentures or deposits shall not exceed Rs. 200 crore, and

(b) has not defaulted in repayment of loans, debentures or deposits referred to in sub-clause (a) and at least a gap of 30 days have lapsed before issuing notice inviting objections or suggestions (in Form No. CAA 9), if any, from the Registrar and Official Liquidators [referred to in section 233(1)(a) of the Act] and on the date of filing of scheme under Section 233(2) of the Act and

(c) a certificate from the auditor of the Company that the Company meets the conditions referred to in this clause shall be filed in Form No. CAA-10A along with the copy of the approved scheme referred to in Section 233(2) of the Act;

(iv) a holding company (listed or unlisted) and a subsidiary company (listed or unlisted):

Provided that this clause shall not apply where the transferor company or companies are listed;

(v) one or more subsidiary company of a holding company with one or more other subsidiary company of the same holding company where the transferor company or companies are not listed;

Learn through Illustration:-

Company 'D' is the subsidiary of Company 'C' and Company 'C' is the subsidiary of Company 'B' and in turn Company 'B' is the wholly owned subsidiary (WOS) of Company 'A'.

In this case Company 'B' is the WOS of Company 'A'. Company 'C' and Company 'D' are subsidiaries of the same holding company i.e., Company 'A'

Subject to the condition stated in the clause, schemes of merger or amalgamation or transfer or division between Company 'A', Company 'B', Company 'C' and Company 'D' or any combination thereof would be covered under this clause.

(vi) merger of the transferor foreign company incorporated outside India being a holding company with the transferee Indian company being its wholly owned subsidiary company incorporated in India referred to in rule 25A(5).

Procedure for Fast-Track Merger under Section 233

Step 1: Conduct preliminary due diligence

Before preparing the scheme, the companies should verify:

eligibility under Section 233 and Rule 25;
status as a small, start-up, unlisted, holding or subsidiary company;
listing status of the transferor company;
loan, debenture and deposit outstanding;
repayment defaults;
charges registered with the ROC;
creditor composition;
pending litigation and regulatory proceedings;
tax implications;
stamp-duty exposure;
sectoral approvals; and
restrictions contained in financing documents, shareholders’ agreements or other contracts.

Eligibility must be established for every company involved. A scheme cannot use Section 233 merely because the transferee company satisfies the prescribed conditions.

Step 2: Prepare the draft scheme

The companies must prepare a detailed scheme covering matters such as:

appointed date and effective date;
transfer of assets and liabilities;
treatment of employees;
continuation of legal proceedings;
cancellation or issue of shares;
share-exchange ratio, where applicable;
accounting treatment;
treatment of inter-company balances;
contracts, licences and statutory approvals;
tax treatment;
dissolution of the transferor company; and
conditions precedent to effectiveness.

The valuation and share-exchange ratio should be supported by a report from a registered valuer wherever applicable.

Step 3: Obtain approval of the Board of Directors

The Board of each company should approve the draft scheme and authorise the directors or officers to:

issue the prescribed notices;
file the declaration of solvency;
convene meetings of members and creditors;
make filings with the ROC and Regional Director;
respond to objections; and
complete the merger process.

Step 4: Issue notice in Form CAA-9

A notice of the proposed scheme must be issued in Form CAA-9, inviting objections or suggestions from:

the Registrar of Companies;
the Official Liquidator;
persons likely to be affected by the scheme;
the applicable sectoral regulator; and
the relevant stock exchange, where applicable.

Regulated companies must also serve the notice upon authorities such as the RBI, SEBI, IRDAI or PFRDA, as applicable. Objections or suggestions may be submitted within 30 days of the notice.

Step 5: Obtain members’ approval

the objections and suggestions received pursuant to Notice given in Form CAA-9 are considered by the companies in their respective general meetings and the scheme is approved by the respective members or class of members at a general meeting holding at least ninety per cent. of the total number of shares

Step 6: File declaration of solvency

Each company involved must file a declaration of solvency in Form CAA-10, as an attachment to Form GNL-1, before convening the meetings of members and creditors.

The directors must declare, after making a full inquiry into the affairs of the company, that:

the company is capable of meeting its liabilities as and when they fall due; and
the company will not be rendered insolvent within one year from the date of the declaration.

The declaration is supported by a statement of assets and liabilities and the auditor’s report on that statement.

For unlisted companies covered by the Rs.200 crore category, the statutory auditor must additionally issue the prescribed certificate in Form CAA-10A. The certificate accompanies the approved scheme filed under Section 233(2).

Step 7: Obtain creditors’ approval

The scheme must be approved by a majority representing at least nine-tenths in value of the creditors or class of creditors of each company.

Creditors may approve the scheme:

at a meeting convened by giving at least 21 days’ notice along with the scheme; or
through written consent.

The scheme should appropriately address secured creditors, unsecured creditors, debenture holders, deposit holders and contingent liabilities.

Step 8: File the approved scheme with the Regional Director

Within 15 days after the conclusion of the meetings of members and/or creditors, the transferee Company must file:

the approved scheme;
report of the result of each meeting;
registered valuer’s report;
prescribed declarations;
auditor’s certificate in Form CAA-10A, where applicable; and
other supporting documents.

The filing is made in Form CAA-11 as an attachment to Form RD-1, together with the prescribed fee.

Where the company is regulated by a sectoral regulator or connected with a stock exchange, a statement explaining how the objections or suggestions of the regulator or stock exchange have been addressed must also accompany the scheme.

Step 9: Examination by ROC, Official Liquidator and Regional Director

The ROC and Official Liquidator may submit their objections or suggestions to the Regional Director.

After examining the scheme and the observations received, the Regional Director may:

confirm the scheme in Form CAA-12; or
refer the scheme to the NCLT where it is considered contrary to public interest or prejudicial to creditors.

The absence of initial NCLT proceedings does not prevent the Regional Director from seeking Tribunal scrutiny where the circumstances require it.

Step 10: File the confirmation order

After confirmation, the Regional Director’s order must be filed with the jurisdictional Registrar of Companies in the prescribed manner.

The scheme becomes effective in accordance with the appointed date, effective date and conditions stated in the scheme and confirmation order.

Effect of Registration of Fast-Track Merger

Upon registration and effectiveness of the scheme:

the assets and liabilities of the transferor company vest in the transferee company;
charges over the transferor company’s property continue and become enforceable against the transferee company;
legal proceedings may continue by or against the transferee company;
the transferor company is dissolved without undergoing winding up;
employees, contracts and business arrangements are dealt with according to the scheme;
shares held by the transferee in the transferor company are cancelled or extinguished; and
the transferee company may be required to update its authorised share capital and pay the applicable differential filing fee after available set-off.

Fast-Track Merger versus Regular NCLT Merger

Particulars	Fast-Track Merger	Regular Merger
Governing provision	Section 233	Sections 230–232
Primary approving authority	Regional Director on behalf of Central Government	NCLT
Eligibility	Restricted to prescribed classes	Generally available to companies
Members’ approval	At least 90% of total number of shares	Statutory majority under Sections 230–232
Creditors’ approval	Nine-tenths in value	Statutory majority under Sections 230–232
Declaration of solvency	Mandatory	Not prescribed in the same manner for every scheme
NCLT involvement	Normally avoided but possible on reference	Mandatory
Relative process	Generally simpler and faster	More extensive Tribunal process

Advantages of Fast-Track Merger

Reduced dependence on NCLT proceedings: Eligible schemes can be processed by the Regional Director without commencing a full Tribunal proceeding, unless the matter is referred to the NCLT.
Lower restructuring cost: A simplified process may reduce litigation expenses, hearing-related costs and the administrative burden associated with an NCLT merger.
Efficient group consolidation: Holding companies can consolidate subsidiaries, fellow subsidiaries can be combined, and overlapping group entities can be rationalised more efficiently.
Greater flexibility for unlisted companies: The 2025 amendment allows a broader class of unlisted companies to undertake a fast-track merger even where they do not qualify as small companies or start-ups.
Support for demergers and business transfers: Eligible companies may use the framework to separate or transfer an undertaking, subject to compliance with the amended rules.
Better utilisation of professional expertise: Company Secretaries, Chartered Accountants, legal advisers, registered valuers and tax professionals can assist management in identifying suitable restructuring opportunities, preparing the scheme and coordinating regulatory approvals.

Role of Company Secretaries in Fast-Track Merger

The expansion of Section 233 creates a significant advisory responsibility on Company Secretaries. Their role may include:

examining eligibility under the Act and Rules;
conducting secretarial and regulatory due diligence;
drafting the scheme and Board documentation;
coordinating valuation and accounting reports;
preparing Forms CAA-9, CAA-10, CAA-10A and CAA-11;
filing GNL-1 and RD-1;
managing members’ and creditors’ approvals;
responding to the ROC, Official Liquidator and Regional Director;
coordinating with sectoral regulators; and
completing post-merger ROC compliances.

CCL Conclusions

By extending fast-track mergers to qualifying unlisted companies, non-wholly owned holding-subsidiary structures, fellow subsidiaries and eligible demergers, the MCA has made Section 233 relevant to a much wider segment of the corporate sector.

The amendment can help businesses consolidate group entities, reorganise undertakings and reduce unnecessary corporate layers through a comparatively efficient regulatory route. However, a Fast-Track Merger remains a detailed legal process requiring proper valuation, solvency assessment, stakeholder approval, regulatory consultation and accurate documentation.

Companies considering this route should conduct a comprehensive legal, financial, tax and regulatory evaluation before finalising the scheme.