Fast-Track 2.0: MCA broadens scope to cover Demergers and complex Mergers

Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025

The Ministry of Corporate Affairs has notified significant amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (G.S.R. 603(E), dated 4th Sept 2025).

Notice of Scheme (Form CAA-9)

• The notice inviting objections or suggestions for a proposed fast-track merger is now required to be issued not only to the Registrar and the Official Liquidator but also to the relevant sectoral regulators such as RBI, SEBI, IRDAI and PFRDA in case of regulated entities.
• In the case of listed companies, the notice must also be issued to the concerned stock exchanges.

Expanded scope of fast-track mergers (Rule 25(1A))

• The scope of companies eligible for fast-track mergers has been widened beyond small companies, start-ups and mergers between a holding company and its wholly owned subsidiary.
• The fast-track route will now also cover:
  • Mergers between unlisted companies (other than section 8 companies) where aggregate borrowings including loans, debentures and deposits do not exceed ₹200 crore and there is no default, subject to filing of an auditor’s certificate in new Form CAA-10A.
  • Mergers between a holding company (listed or unlisted) and its subsidiary (listed or unlisted), except where the transferor company is listed.
  • Mergers between subsidiaries of the same holding company, provided the transferor companies are not listed.
  • Mergers of a foreign holding company with its wholly owned subsidiary incorporated in India (reverse flip).

Application to demerger (Addition of Sub-Rule 9)

• The fast-track provisions have now been expressly extended to cover schemes of division or transfer of undertakings (demergers).
• Regional Directors were already permitting such schemes in practice, and the rules now provide statutory recognition.

Other procedural refinements

• Form CAA-10 is now required to be filed as an attachment to Form GNL-1.
• Form CAA-11 must include a statement explaining how objections or suggestions of regulators and stock exchanges have been dealt with.
• New and revised versions of the forms CAA-9, CAA-10, CAA-10A, CAA-11 and CAA-12 have been notified.

Do you think these changes will truly make fast-track mergers and demergers the preferred route for mid-sized corporates, or will practical hurdles still push companies towards the NCLT process?

Also Read Press Release by Government: MCA Widens scope of fast track mergers under Companies Act, 2013

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION

New Delhi, the 4th September, 2025

G.S.R. 603(E).––– In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with section 233 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 namely :-

1.Short title and commencement.‐ (1) These rules may be called the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (hereafter referred to as “the said rules”), in rule 25,̶

(a) for sub-rule (1), the following sub-rule shall be substituted, namely:-

“(1) The notice of the proposed scheme, under clause (a) of sub-section (1) of section 233 of the Act, to invite objections or suggestions from the Registrar and official liquidator or persons affected by the scheme shall be in Form No. CAA.9:

Provided that in case of a company regulated by a sectoral regulator such as Reserve Bank of India, Securities and Exchange Board, Insurance Regulatory and Development Authority of India or Pension Fund Regulatory and Development Authority, as the case may be, the notice shall be issued to the concerned regulator and to respective stock exchanges, for listed companies, for objections or suggestions within the period specified in clause (a) of sub-section (1) of section 233.”.

(b) in sub-rule (1A),−

(i) in clause (ii), for the words “small company”, the words “small company; or” shall be substituted.

(ii) after clause (ii), the following clauses shall be inserted, namely:-

“(iii) one or more unlisted company, (not being company referred to in section 8 of the Act) with one or more unlisted company, (not being company referred to in section 8 of the Act), where every company involved in the merger,−

(a) has, in aggregate, outstanding loans, debentures or deposits not exceeding two hundred crore rupees, and

(b) has no default in repayment of loans, debentures or deposits referred to in sub-clause (a),

on a day, not more than thirty days before the date of notice referred to in clause (a) of sub-section (1) of section 233 of the Act and on the date of filing of scheme under sub-section (2) of section 233 of the Act:

Provided that 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 sub-section (2) of section 233 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;

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 sub-rule (5) of rule 25A.”.

(c) in sub-rule (2), after the words, letters and figures “Form No. CAA.10”, the brackets, words, letters and figure “(as attachment to Form GNL-1)” shall be inserted.

(d) in sub-rule (4), for clause (a), the following clause shall be substituted, namely:-

“(a) For the purposes of sub-section (2) of section 233 of the Act, the transferee company shall, within a period of fifteen days after the conclusion of the meeting of members or class of members or creditors or class of creditors, file a copy of the scheme as agreed to by the members and creditors, along with a report of the result of each of the meetings and the report of the registered valuer in Form No. CAA.11 (as attachment to Form RD-1), with the Central Government, along with the fees as provided under the Companies (Registration Offices and Fees) Rules, 2014:

Provided that in case of a company referred to in proviso to sub-rule (1), a statement about the manner in which the objections or suggestions, if any, of the sectoral Regulator or the stock exchanges, as the case may be, have been addressed in the scheme shall be attached with the scheme.”.

(e) after sub-rule (8) the following sub-rule shall be inserted, namely:-

“(9) The provisions of this rule shall, mutatis mutandis, apply in respect of a scheme of division or transfer of undertaking of a company referred to in clause (b) of sub-section (1) of section 232 and while passing such order, the Central Government may make provisions of the nature specified in clauses (a) to (j) of sub-section (3) of section 232 to the extent they are applicable.”.

3. In the said rules, in Annexure-A, for Forms CAA-9, CAA-10, CAA-11 and CAA-12, the following Forms shall be substituted, namely:-

FORM NO. CAA.9
[Pursuant to section 233(1)(a) and rule 25(1)]
Notice of the scheme inviting objections or suggestions

***

FORM NO. CAA.10
[Pursuant to section 233(1)(c) and rule 25(2)]
Declaration of solvency

***

FORM NO. CAA.10A
[Pursuant to section 233 and rule 25 (1A) (iii)]
Certificate by the auditor

***

FORM NO.CAA.11
[Pursuant to section 233(2) and rule 25(4)]
Notice of approval of the scheme

***

FORM NO.CAA.11
[Pursuant to section 233(2) and rule 25(4)]
Notice of approval of the scheme

***

FORM NO. CAA.12
[Pursuant to section 233 and rule 25(5)]
Confirmation order of scheme of merger or amalgamation or transfer or division of undertaking between

[F. No. 2/31/CAA/2013 – CL.V Part] BALAMURUGAN D., Jt. Secy.

Note:- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R 1134(E), dated the 14^th December, 2016 and subsequently amended vide the following notifications: –