MCA notifies rules streamlining Fast-Track Mergers, Amalgamations, Divisions and Transfers

Introduction

With a view to streamlining the process of fast-track Mergers and Amalgamations (“M&A”) under Section 233 of the Companies Act, 2013 (“Act”), the Ministry of Corporate Affairs (“MCA”) has vide its Notification No. G.S.R. 603(E) dated 04th September 2025, introduced changes to The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (“Rules”) by notifying The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025 (“Amendment Rules”).

These Amendment Rules came into force on 04th September, 2025.

The amendments have been made to Rule 25 of the Rules, dealing with the procedure for fast-track M&A under Section 233 of the Act.

1. Amendment to Rule 25(1): Mandatory Notice in Form CAA.9 and Intimation to Regulators/Exchanges –

Rule 25(1) has been amended to specify that the notice of the proposed scheme under Section 233(1) (a) of the Act must be issued in Form CAA.9. Further, in the case of companies regulated by sectoral regulators such as the Reserve Bank of India, Securities and Exchange Board, Insurance Regulatory and Development Authority of India or Pension Fund Regulatory and Development Authority, or listed companies, the notice must be sent to the concerned regulator and respective stock exchanges for objections or suggestions within the prescribed period.

• Expansion of Sub-rule (1A): Eligibility for Fast-Track Mergers –

Sub-rule 25 (1A) has been expanded and new clauses (iii) to (vi) have been inserted expanding the scope of companies eligible for fast-track mergers to include:

1. Clause (iii) which permits the merger between two unlisted companies (other than Section 8 companies) provided that the aggregate outstanding loans, debentures, or deposits of all companies involved do not exceed INR ₹200,00,00,000/- (Rupees Two Hundred Crore Only) and there is no default in repayment of such obligations. Compliance with these conditions must be confirmed through a certificate issued by the auditor of the company in Form CAA.10A, which is required to be filed along with the approved scheme under section 233(2) of the Act.
2. Clause (iv) which covers merger of a holding company (listed or unlisted) with its subsidiary company (listed or unlisted), except where the transferor is a listed company.
3. Clause (v) which provides for merger of one or more subsidiary companies of a holding company with one or more other subsidiaries of the same holding company, provided the transferor companies are not listed.
4. Clause (vi) which allows the merger of a foreign holding company (incorporated outside India) with its wholly owned Indian subsidiary, in line with Rule 25A (5).

• Amendment to Rule 25(4)(a): Filing Timeline, Valuer’s Report and Regulator/Exchange Compliance –

The amendment to Rule 25(4)(a) makes 3 (three) key changes:

1. The time limit for filing the scheme with the Central Government (“CG”) has been extended from 7 (seven) days to 15(fifteen) days after the conclusion of the members’ or creditors’ meetings.
2. In addition to the scheme and the report of the meetings, the report of the registered valuer must also be filed in Form CAA.11, which is now required to be submitted as an attachment to Form RD-1.
3. If the company falls under the category specified in the proviso to sub-rule (1) (i.e., companies regulated by sectoral regulators or listed companies), a statement explaining how objections or suggestions from the sectoral regulator or stock exchanges have been addressed must also accompany the scheme.

• Extension of Rule 25 to Divisions and Transfers under Section 232(1)(b) of the Act

The newly inserted Rule 25 (9) clarifies that the provisions of Rule 25 will also apply, mutatis mutandis, to schemes involving the division or transfer of an undertaking of a company under Section 232(1)(b) of the Act. In such cases, while passing the confirmation order, the CG is empowered to incorporate provisions similar to those specified under section 232(3)(a) to (j), to the extent relevant. This effectively extends the fast-track merger framework to cover divisions and transfers of undertakings, ensuring procedural consistency and enabling the CG to impose conditions necessary to safeguard stakeholders’ interests.

Further the said Amendment Rules have substituted the following forms: (i) Form No. CAA-9 (Notice of the scheme inviting objections or suggestions), (ii) Form No. CAA-10 (Declaration of solvency) and (iii) Form No. CAA.11 (Notice of approval of the scheme) (iv) Form No. CAA.12 (Confirmation order of scheme of merger or amalgamation or transfer or division of undertaking). A new Form No. CAA.10A (Certificate by the auditor) has also been introduced.

I. Form No. CAA-9: It is used by a company proposing a fast-track merger, amalgamation, division, or transfer of undertaking to formally invite objections or suggestions regarding the proposed scheme.

Additions: The amended Form CAA.9 is no longer restricted to schemes of merger or amalgamation but now also applies to schemes of division or transfer of undertakings. To reflect this expansion, the expression “scheme of merger or amalgamation” used in the old form has been replaced with the wider phrase “scheme of merger or amalgamation or division or transfer of undertaking.”

Omission: The requirement to mention the “authorised representative of the transferor company” at the end of the notice has been replaced with the neutral term “authorised representative,” without distinguishing between transferor and transferee.

II. Form No. CAA.10A: Form CAA.10A has been newly introduced pursuant to section 233 of the Act and Rule 25(1A) (iii). This form is a certificate issued by the statutory auditor of the company to confirm eligibility for undertaking a fast-track merger under the expanded scope of Rule 25. Specifically, it certifies that the company meets the prescribed conditions — namely, that the aggregate of its outstanding loans, debentures, and deposits does not exceed INR ₹200,00,00,000/- (Rupees Two Hundred Crore Only) and that there has been no default in repayment of these obligations.

This form requires disclosure of key financial particulars of the company as on a specified date, including paid-up share capital, free reserves, outstanding loans, outstanding debentures, and outstanding deposits. The auditor, after due verification, certifies these details and affixes their signature, name, membership number, and place and date of certification.

In essence, Form CAA.10A functions as an auditor’s confirmation that the company satisfies the monetary and default-related conditions laid down in Rule 25(1A) (iii), and it must be filed along with the copy of the approved scheme under section 233(2) of the Act.

III. Form No. CAA.11: This form is used by the transferee or resultant company to notify the CG, Registrar, and Official Liquidator about the approval of a scheme of M&A, or transfer/division of undertaking. It captures details of the companies involved, approvals from members and creditors, and declarations by directors regarding compliance with section 233 of Act.

Additions: The amended form now covers more types of schemes and company relationships. Companies must indicate the relationship between the transferor and transferee, including:

1. Holding and subsidiaries (other than wholly owned subsidiaries)
2. Start-up companies
3. Small company and start-up companies
4. Foreign holding company and Indian wholly owned subsidiary
5. Others (with details to be specified)

In addition, the form now requires the company to specify the type of scheme, i.e., whether it is a:

1. Merger or amalgamation, or
2. Transfer or division of undertaking

The form now also requires the brief particulars of the scheme, including parties involved, nature and amount of consideration, manner of issuance of shares, and share entitlement ratio. Additionally, directors must declare that any legal proceedings by or against the transferor company will continue against the transferee or resultant company.

Omissions: References to “transferee company” have been replaced with “transferee/resultant company” to cover cases of divisions.

IV. Form No. CAA.12: It serves as the confirmation order issued by the CG under section 233 and rule 25(5) upon approval of a scheme.

Additions: The form now applies not only to schemes of M&A, but also to schemes involving the transfer or division of undertakings. Accordingly, the parties to the scheme are described more comprehensively as the “transferor/demerged company” and the “transferee/resultant company.”

Omissions: The heading of the form and the body text have been revised to reflect this wider applicability. Instead of limiting confirmation to “compromise, arrangement or merger,” the form now explicitly refers to “merger or amalgamation or transfer or division of undertaking.”

Conclusion

The amendments introduced by the Amendment Rules significantly enhance the framework for fast-track mergers, amalgamations, divisions and transfers. By expanding the eligibility criteria in Rule 25, extending filing timelines, introducing new compliance requirements and broadening the scope to include divisions and transfers, the amendments aim to simplify procedures, improve regulatory coordination and ensure smoother compliance with the Rules. These changes are expected to streamline fast-track merger, amalgamation, division and transfer processes, reduce procedural delays and promote ease of doing business while safeguarding stakeholders’ interests through clearer guidelines and strengthened accountability.