Initially, fast-track merger was available for two or more small companies, a holding company with its wholly owned subsidiary, and two or more start-ups. Recent amendment effective 4th September 2025 have expanded this to include the following:
- unlisted companies meeting prescribed criteria- having loan less than 200 crores and no default in repayment of deposits, debentures and loans,
- fellow subsidiaries within a group,
- foreign holding companies merging with their wholly owned Indian subsidiaries
Exclusions:
- Section 8 (non-profit) companies
- listed transferor companies
Guiding Provision:
Rule 25 (1A) (iii) of Companies (Compromises, Arrangements and Amalgamations). High Court approval is not required in this Merger, only Regional Directors (Powers of Central Government delegated to Regional Director vide Notification No. S.O. 4090(E) dated 19th December, 2016), Registrar of Companies and Official Liquidator are the authorities whose approval is required.
Steps:
- Draft the Scheme of Merger with declaration of Solvency
2.Convene a Board Meeting in both the Companies and pass the following resolutions:
a.Approval of the draft scheme of Merger
b.Approval of draft Declaration of Solvency
c.Authorise a Director/Company Secretary to do acts and deeds in this regard
d.Approval of Statement of Assets & Liabilities of the company revealing the current position and adopt the Auditors report on the statement
3.Send the Notice of the proposed Scheme inviting objections or suggestions, if any, in Form CAA 9 with necessary documentation to the following:
a.Registrar of Companies
b.Official Liquidator (OL)
c. Person affected by the scheme (like Income Tax Department, RBI, SEBI, CCI if necessary, or other sectoral regulators or authorities which are likely to be affected by the scheme, etc.). ROC, OL and tax department have 30 days to raise objections or suggestions on the merger scheme. The companies must address any objections
4.Stamping, Notary and filing of declaration of Solvency in Form CAA 10 (Form GNL 2) for both the Companies and filing of Form CAA10A- certificate of auditor that company meets the conditions mentioned in Rule 25 (1A) (iii).
5.After expiry of 30 days of Point 4 above, convene an Extra Ordinary General Meeting in both the Companies
6.Pass a Special Resolution for approval of Scheme of Merger after modification on the basis of the suggestions and objections-approval required from 90% of the members
7.Convene a Creditors meeting or take their written approval in form of Affidavits- required from 90% in value
8.Filing of Scheme with necessary documents:
a.To the ROC in Form GNL 1
b.To Official Liquidator (Hand Delivery)
c.To Regional Director in Form CAA 11 as attachment to Form RD 1 with report of the result of each of the meetings and the report of the registered valuer and hand delivery with the copy of challan
9.Liasoning with the ROCs and the Official Liquidators officers and arrange for the respective reports to the Regional Director.
10.Dealing with the Regional Director and arrange for the Order of Merger by providing further documents or clarifications, if any.
11.On receipt of the Order from the Regional Director, file Form INC 28 by both the Companies.
12.Change in Authorised Capital of the transferee Company to accommodate shareholding post-merger
In conclusion, mergers serve as a powerful strategic tool for Indian corporates to achieve growth, diversification, operational efficiency, and enhanced competitiveness. The Companies Act, 2013, especially through provisions like the fast-track merger under Section 233, has significantly streamlined the merger process, reducing complexity, time, and costs for eligible companies. Merger offers significant direct tax advantages too, as the merged company can, subject to certain conditions, carry forward and set off the accumulated losses and unabsorbed depreciation of the merging company, thereby reducing its taxable income and optimizing tax liabilities.
Akansha Rathi and Associates (ARACS), Company Secretary Firm in Navi Mumbai is engaged into compliance related services. We have a team of experts who not only possess required skills and experience but also have worked in complex business environment and were engaged in providing complex solutions in terms of providing related Compliance services to our clients.