Section 233 of the Companies Act, 2013 (the “Act”) introduced the concept of fast-track mergers (“FTMs”) to provide a simplified and expedited restructuring framework for certain classes of companies. The mechanism was intended to reduce reliance on the National Company Law Tribunal (“NCLT”) by vesting approval powers primarily with the Regional Director (“RD”). This mechanism finds its roots in the J.J. Irani Committee Report of 2005 on Company Law, which suggested a less stringent framework for mergers among associated companies, private companies or companies where no public interest is involved.
The recent Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025[1] (the “Amended Rules”) have broadened the scope of eligible entities for FTMs and have revamped certain compliances. The following classes of companies have been additionally included in the enhanced scope of eligible entities for FTMs, with certain specific applicable conditions for each of them: (i) holding company and its subsidiary company(ies); (ii) 2 or more unlisted companies; (iii) 2 or more fellow subsidiary companies; and (iv) reverse cross border merger involving a wholly owned subsidiary of a foreign company. The revamped compliances include: (i) requirement of notifying stock exchanges for listed companies and other applicable sectoral regulators for all companies; (ii) mandatory filing of scheme with the RD within 15 days of its passing in the board meeting; (iii) revision of format of forms CAA-9 to CAA 12; and (iv) clarification with regard to the mutatis mutandis applicability of the Amended Rules in cases of schemes of division or transfer of undertakings.
While the Amended Rules are a step in the right direction, they leave certain critical issues unaddressed. This article provides a critique of such issues persisting in the implementation of mergers and demergers under the FTM route.
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Authors of the Article:
Mr. Saheb Singh Chadha
Associate Partner
and
Mr. Akshay Chugh
Associate
The views expressed above are personal and do not represent those of Vaish Associates Advocates. They do not constitute legal advice.
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