The Ministry of Corporate Affairs ("MCA") has on September 4, 2025notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025 ("Amendment Rules") amending the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 ("CAA Rules").
The Amendment Rules significantly broaden the scope of fast track mergers under Section 233 of the Companies Act, 2013 ("Act") by introducing new categories of eligible companies, clarifying the applicability of the fast-track route to demergers and updating various statutory forms to make the process more streamlined and transparent.
The key highlights of the Amendment Rules are:
1. Expansion of list of eligible companies under the fast-track route: Previously, the fast-track route was limited to two or more start-up companies, two or more small companies, one or more start-up company with one or more small company as well as between a holding company and its wholly owned subsidiary. The Amendment Rules now extend eligibility to the following additional categories under the fact-track route:
- unlisted companies (except not-for-profit companies) provided that their total outstanding loans, debentures or deposits do not exceed INR 200 Crores and they are not defaulting in repaying such outstanding loans, debentures or deposits;
- a holding company (listed or unlisted) and its subsidiary (listed or unlisted), subject to the transferor being an unlisted company;
- subsidiaries of the same holding company, subject to the transferor being an unlisted company; and
- foreign holding companies with their Indian wholly owned subsidiaries.
By allowing a wider range of companies to access the fast-track route, the Amendment Rules make restructuring more accessible and simpler, thereby enabling quicker consolidation, improved operational efficiencies and smoother business reorganizations.
2. New approval compliance requirements:Prior to the Amendment Rules, it was necessary to seek objections or suggestions fora proposed scheme of reorganization under the fast track route from only the Registrar of Companies and the Official Liquidator.
The Amendment Rules have now however expanded this framework and companies regulated by sectoral regulators such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), or Pension Fund Regulatory and Development Authority (PFRDA) must now issue notices of the scheme to the relevant regulator seeking any objections or suggestions from the concerned regulators. In case of listed companies, notices seeking objections or suggestions for any schemes for corporate reorganization under the fast track route must now also be issued to the concerned stock exchanges.
In the event any objections or suggestions are raised by any regulator (or any stock exchange in the event that one of the parties to a reorganization pursuant to a proposed scheme under the fast track route is listed), then, when there organization scheme is filed with the concerned Reginal Director for approval, such filed scheme must be accompanied by a detailed statement setting out how those objections or suggestions have been addressed.
While these requirements strengthen governance and safeguard stakeholder interests, they may also dilute some of the efficiencies that the fast-track route aims to achieve by increasing the number of regulators the concerned entities need to approach for sign-off on a fast track scheme of reorganization. Furthermore, companies will need to budget for sufficient additional time/resources to address any such regulatory concerns that have been raised.
3. Applicability of fast-track route to demergers: The earlier CAA Rules were silent on whether the fast-track mechanism could be applied to demergers, which led to ambiguity and inconsistent positions being taken by different Regional Directors. The Amendment Rules now remove this uncertainty by expressly clarifying that, with necessary modifications, the fast-track route will also be available for schemes of division or transfer of undertakings under Section 232 of the Act. This clarification brings much-needed clarity on a point that was otherwise ambiguous.
4. Revision and introduction of statutory forms: The Amendment Rules have substituted several existing forms with updated versions to enhance clarity, standardization, and compliance in the merger and restructuring process. The revised forms include:
- Form CAA-9 – Notice of scheme inviting objections or suggestions;
- Form CAA-10 – Declaration of solvency;
- Form CAA-11 – Notice of approval of the scheme; and
- >Form CAA-12 – Confirmation order of the scheme.
In addition, a new Form CAA-10A has been introduced, requiring an auditor's certification of satisfaction of debt-related conditions specified in the Amendment Rules.
The expansion of the classes of companies eligible to use the fast-track route under the amended CAA Rules represents a significant move towards simplifying corporate restructuring in India. By moving more categories of transactions outside the regular NCLT approval process, the amendment helps de-clog the burden on NCLTs and shorten deal timelines. For businesses, this means greater flexibility and clarity in undertaking reorganizations such as mergers, demergers, and group consolidations, while for regulators and stakeholders, it promotes a more business-friendly environment without compromising on oversight. Overall, these reforms signal the government's commitment to ease of doing business and to fostering a modern, efficient corporate law regime that supports growth and investment.
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