Govt notifies wider scope for fast track mergers under Companies Act

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The government has notified rules expanding the scope of fast track mergers under the Companies Act, 2013, bringing in more categories of companies within the simplified route for amalgamations and demergers, an official statement said on Thursday.

The move will provide quicker turnaround for corporate restructuring. The framework will particularly benefit unlisted entities and groups looking at internal reorganisations without the need for lengthy tribunal approvals.

The Ministry of Corporate Affairs (MCA) has amended the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, through a notification issued on September 4, 2025, following stakeholder consultations.

The changes flow from the Union Budget 2025-26, which promised measures to ease doing business and cut delays in approvals.

Under the revised framework, fast track mergers or demergers can now be undertaken two or more unlisted companies (other than section 8 companies) which meet prescribed thresholds of outstanding loans, debentures or deposits.

Section 8 companies are non-profit organisations in India, registered under the Companies Act, 2013.

In addition, mergers between a holding company and its subsidiary -- except cases where the transferor company is listed -- have been brought under the streamlined process.

The rules also permit such mergers between two or more subsidiaries of the same holding company, again excluding listed transferors.

Under the section 233 of the Companies Act, it allows mergers between certain classes of companies with approval from the central government, delegated to regional directors.

Until now, the route was available to small companies, startups, and holding companies and its wholly-owned subsidiaries.

Earlier, a 2021 amendment had extended the scope to startups and small companies, while in 2024 the fast track route was opened for reverse flipping -- mergers of foreign holding companies with their wholly-owned Indian subsidiaries.