The Fast Track Merger (‘FTM’) route was introduced under Section 233 of the Companies Act, 2013 (‘the Act’), allowing certain classes of companies to get the merger and amalgamation schemes approved by Regional Director (‘RD’) instead of National Company Law Tribunal (‘NCLT’) in a time bound manner. Over a period of time, the corporate restructuring framework in India is undergoing significant, continuous liberalization, by enhancing the “fast-track” merger route and reducing burden on the overburdened NCLTs.
Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025
The Ministry of Corporate Affairs vide notification dated 04th September, 2025 introduced the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025 to allow certain more class of companies to undertake fast track merger under Section 233 of the Act. With this amendment, the following class of companies are eligible to file scheme under fast track route:
- Two or more small companies;
- Between a holding company and its wholly-owned subsidiary company;
- Two or more start-up companies;
- One or more start-up company with one or more small company;
- One or more unlisted company, (not being Section 8 company) with one or more unlisted company, (not being Section 8 company), where every company involved in the merger-
- has, in aggregate, outstanding loans, debentures or deposits not exceeding 200 crore rupees, and has no default in repayment of loans, debentures or deposits on a day, not more than thirty days before the date of notice of merger 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 above shall be filed in Form No. CAA-10A along with the copy of the approved scheme.
For unlisted companies, these above conditions need to be satisfied on two occasions viz. within 30 days prior to the date of inviting objections from the regulatory authorities’ u/s 233(1) and on the date of filing of scheme u/s 233(2) and such application for approval of scheme must be accompanied by auditor certificate confirming the above conditions.
- 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;
- 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;
- 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.
The following are other amendments in Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025:
- 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 of scheme shall be issued to the concerned regulator and to respective stock exchanges, for listed companies.
- The time period to file scheme of merger (Form RD-1) is increased from existing 7 days to 15 days from the date of approval of members and creditors.
- Clarification on filing of CAA-10 as an attachment to form GNL-1 as many professionals filled CAA-10 in form GNL-2 earlier.
- Clarification that this rule is apply, in respect of a scheme of division or transfer of undertaking.
Process of Fast Track Merger under Section 233 of the Companies Act, 2013
1. Primary Steps
Firstly, the Applicant Companies need to check whether they are eligible to file application under fast track route. If Yes, then the next step is to appoint the registered valuer for arriving at the share exchange ratio, and statutory auditor for auditors’ report on statement of assets and liabilities, eligibility certificate etc.
2. Board approval
The Applicant Companies need to call the board meeting for the following agenda:
- To take note of the valuation report received from the registered valuer;
- To approve the draft scheme of merger;
- To approve the draft notice inviting suggestions or objections in form CAA-9;
- To approve statement of assets and liabilities authorizing 2 (two) directors of the Company to sign such statement of assets and liabilities;
- To approve draft declaration of solvency in form CAA-10;
- To approve draft notice of meeting of members and creditors authorizing any person to send notice to meeting along with draft scheme of merger.
3. Filing of notice of draft scheme of merger and declaration of solvency
Once board of directors of Applicant Companies approves draft scheme of merger, the Applicant Companies needs to file form CAA-9 i.e notice inviting suggestions/objections to the following departments:
- To RoC: via e-form GNL-1
- To Official Liquidator: via hand delivery / registered post / speed post
- To Income Tax: via hand delivery / registered post / speed post
- To Sector specific regulatory, if applicable: via hand delivery / registered post / speed post.
The Applicant Companies also needs to file separately form CAA-10 i.e declaration of solvency in e-form GNL-1 with the jurisdictional RoC.
4. Further suggestions / objections / no-objections
Any regulatory authorities may ask for any additional documents / information within 30 days from the date of filing form CAA-9 which needs to be provided / replied by the Applicant Companies.
5. Members and Creditors Approval
Once 30 days are over from the date of filing and submitting CAA-9, the Applicant Companies needs to convene shareholders meeting and pass the resolution with at least 90% of the total number of shares for the approval of scheme. There are no provisions under the Act to dispense meeting of members even if all the members gave their written consent and hence, the Applicant Companies mandatorily convene shareholders meeting to discuss the objections/ suggestions, if any received from any regulatory authorities and pass resolution for approval of scheme.
The Applicant Companies needs to take creditors approval representing at least 90% in value of the creditors or class of creditors, for the approval of scheme. When the creditors representing 90% in value of total creditors, provides their written consent, the Applicant Companies can dispense the meeting.
The Applicant Companies must file e-form MGT-14 with the RoC for the resolution passed by the members. However, the timeline to file form MGT-14 is 30 days from the date of passing resolution, it is advisable to file form MGT-14 before filing of form RD-1 which needs to be filled within 15 days from the date of passing resolution.
6. Filing of approved scheme of merger
The Transferee Company shall, within a period of 15 days after the conclusion of the meeting of members or creditors, file a copy of the scheme along with a report of the result of each of the meetings and the report of the registered valuer in Form CAA-11 to the following departments:
To RoC: via e-form GNL-1
To RD: via e-form RD-1
To OL: Via hand delivery / registered post /speed post / email
To Sector specific regulatory, if applicable: via hand delivery / registered post /speed post.
7. Approval by Regional Director and post approval compliances
Any regulatory authority to which draft scheme is filled may send their objection directly to the RD. RD, may also ask for any additional documents from the transferee company before approval.
Documents required for Fast Track Merger
On filing the final scheme with the RD, it is advisable to keep the following documents ready and submit to the RD, when asked, either as a hard copy or in a digital mode via pendrive or via email to the official email id:
Documents checklist for Fast Track Merger
1. Statutory Auditors certificate certifying eligibility to apply for fast track merger;
2. Form CAA-9 i.e Notice of scheme of merger and proof of submission of CAA-9 to RoC, OL and other sectoral regulator, if applicable;
3. Form GNL-1 for CAA-9 and its challan;
4. Form CAA-10 i.e Declaration of solvency;
5. Form GNL-1 for filing declaration of solvency and its challan;
6. Statement of Asset and Liabilities and Auditors report thereon;
7. Valuation report of registered valuer;
8. Affidavit from directors verifying list of members;
9. Notice of General Meeting;
10. Minutes of General Meeting;
11. Auditors certificate verifying list of creditors;
12. Consent of creditors / resolution of creditors meeting;
13. MOA and AOA of Applicant Companies;
14. Audited financials of last 3 years of Applicant Companies;
15.Auditor certificate for accounting treatment;
16. Director declaration on no inquiry, inspection, enforcement action is pending;
17. Board resolution of members of Applicant Companies if there are corporate shareholders of Applicant Companies;
18. Proof of compliance of Significant Beneficial Owner (SBO), if applicable.
Where no objection and suggestion are received from respective regulatory authority and on satisfaction on RD, it shall pass approval order the merger in Form CAA-12 within 60 days from the date of filing of scheme. Provided that if the Regional Director does not issue a confirmation order or does not file any application to NCLT within a period of 60 days of the receipt of the scheme, it shall be deemed that it has no objection to the scheme and a confirmation order shall be issued accordingly.
The Applicant Companies shall file Form INC-28 with respective ROC along with copy of RD order affirming the merger. The Transferee Company shall also attach working of revised authorized share capital and pay additional fees on increase in authorized share capital, if any as an attachment of form INC-28.
Challenges
Approval threshold
Presently, the Fast Track Merger requires approval of shareholders holding whopping 90% of the total number of shares which is practically not possible for listed companies to get such approval, thereby defeating the very objective of fast-tracking mergers. This threshold has been observed to be onerous, and needs to be amended with 90% of shareholders present and voting to make it more practical and rational.
Cross border merger
Regulation 9(1) of the FEMA (Cross-Border Merger) Regulations, 2018, provides that mergers complying with the prescribed framework are deemed to have RBI approval. Yet, as a matter of process, notice of such scheme must now be served on all relevant regulators for their comments or objections. This strengthens oversight but could also lengthen timelines, as companies may need to wait for regulatory clearances before giving effect to the scheme.
Conclusion
The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, makes a significant change in India’s corporate restructuring laws. While practical challenges, such as shareholder approvals, regulatory clearances, and compliance burdens remain, the overall framework now offers a more predictable, cost-effective, and transparent mechanism for companies seeking to consolidate, restructure, or optimize their operations, supporting faster business decision-making and overall economic growth.
(Republished with amendments)
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