Introduction
The Ministry of Corporate Affairs (MCA), by notification G.S.R. 603(E) dated 4th September 2025, has introduced the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025. These rules expand the ambit of fast-track mergers under Section 233 of the Companies Act, 2013. The reform is intended to ease restructuring, reduce dependence on the National Company Law Tribunal (NCLT), and shift simpler schemes to an administrative route through the Regional Director (RD). For more details, please click here.
Expanded Eligibility
The amendments substantially widen eligibility for the fast-track route. Besides small companies and wholly-owned subsidiaries, unlisted companies with debt not exceeding ₹200 crore and no repayment default may now use this process, subject to auditor certification (Form CAA-10A). Mergers between holding and subsidiary companies, whether listed or unlisted, are also permitted, except where the transferor is listed. Fellow subsidiaries under a common holding company are now eligible, provided the transferors are unlisted. Finally, inbound cross-border mergers are expressly included, enabling a foreign holding company to merge into its Indian whollyowned subsidiary.
Procedural Changes
The procedural framework has also been strengthened. Companies regulated by RBI, SEBI, IRDAI, or PFRDA must now serve notices of the scheme in Form CAA 9 to the relevant regulator, and listed companies must notify stock exchanges. Objections or comments received from these bodies must be addressed and disclosed when the scheme is filed before the RD. The transferee company is required to file the approved scheme, together with Form CAA.11, within fifteen days of the conclusion of members' and creditors' meetings. A notable change is the extension of the fast-track process to schemes of division or transfer of undertakings, which broadens the mechanism beyond amalgamations.
Stakeholder Impact
These reforms are expected to create efficiencies across the corporate landscape. For SMEs and unlisted companies, the amendments provide a more accessible and costeffective route to consolidation. For large corporates and multinationals, the ability to merge non-wholly-owned and fellow subsidiaries simplifies governance structures and reduces compliance overheads. For startups, particularly Indian-origin companies domiciled abroad, the recognition of inbound “reverse flips” provides an incentive to re-domicile in India. At the same time, the compliance burden is now front-loaded, requiring auditors, valuers, and advisors to ensure greater rigour before filings are made.
Regulatory Safeguards and Challenges
Despite these relaxations, important safeguards remain. Schemes must still secure approval from ninety percent of shareholders and creditors, which can be difficult to achieve in practice. The RD continues to have the discretion to refer a scheme to the NCLT if it is deemed contrary to public interest, a term that is not defined and therefore subject to wide interpretation. This makes thorough preparation, robust disclosure, and regulator engagement critical to the success of any fast-track merger.
MHCO Comment
The 2025 amendments signal a deliberate shift in India's M&A framework from judicial to administrative oversight. While they promise speed and efficiency, they also demand a higher level of preparedness and accountability from companies and their advisors. By extending eligibility to mid-sized and group entities, and by expressly recognising inbound cross-border mergers, the reforms are positioned to encourage group restructurings, SME consolidations, and re-domiciliation of overseas startups. Ultimately, the fast-track route is now broader and quicker, but it is also complianceintensive, requiring meticulous planning and execution.
This article was released on 11 September 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
