What is a fast-track merger under the Companies Act?

A fast-track merger is a simplified procedure where companies can get their merger or demerger approved by the Regional Director of the Ministry of Corporate Affairs (MCA) instead of going through the National Company Law Tribunal (NCLT). This results in less paperwork, shorter timelines, and lower costs for eligible companies.

Which companies were previously eligible for fast-track mergers?

Until now, only a limited category of companies could use the fast-track merger route, including two or more small companies, a holding company and its wholly-owned subsidiary, start-ups (two or more start-ups, or a start-up merging with a small company), and a foreign holding company merging with its wholly-owned Indian subsidiary (known as a "reverse flip").

How does the amendment benefit mid-sized companies?

Mid-sized companies that were previously too large to qualify as "small companies" but still wanted a quicker and cheaper merger route can now use the fast-track process, provided their total outstanding loans, debentures, or deposits do not exceed ₹200 crore, and there is no default in repaying these borrowings.

Can listed companies use the fast-track merger process?

While the amendment has expanded the scope, listed companies cannot use the fast-track route if they are the transferor company (the one being merged). However, a listed holding company can merge its unlisted subsidiary through the fast-track process.

How does the amendment help corporate groups?

Large business groups can now restructure their group companies more easily using the fast-track route, as the amendment allows mergers between holding companies and their subsidiaries (even if listed or unlisted), as well as mergers between subsidiaries of the same holding company.

Can companies planning a demerger use the fast-track process?

Yes, the amendment clearly states that schemes of division or transfer of undertakings (demergers) can also be done through the fast-track process, providing legal certainty and making it easier for companies to plan spin-offs and reorganizations.

What are the new intimation requirements for companies?

Earlier, companies only had to send a notice to the Registrar of Companies (RoC) and the Official Liquidator. Now, the notice (Form CAA-9) must also be sent to sector regulators such as RBI, SEBI, IRDAI, and PFRDA, if the companies involved are regulated by these bodies, and to stock exchanges where their shares are listed.

What are the updated forms and procedures introduced by the amendment?

The amendment has introduced new and revised forms, such as Form CAA-10A (for auditor's certificate), revised versions of Forms CAA-9, CAA-10, CAA-11, and CAA-12, and new filing requirements, like including a statement on addressing regulators' objections or suggestions.

Why is this amendment important for businesses?

The amendment is a positive step for the Indian business environment, allowing mid-sized companies, corporate groups, and start-ups to restructure more efficiently, saving time, legal costs, and effort. It encourages more efficient corporate restructuring and supports ease of doing business in India.

MCA Expands Fast-Track Mergers and Demergers under the Companies Act, 2013

Q: What are the key changes introduced by the MCA's recent amendment?

The amendment has expanded the scope of fast-track mergers and demergers to include mid-sized unlisted companies with limited borrowings, mergers between holding companies and their subsidiaries (even if listed or unlisted), mergers between subsidiaries of the same holding company, and demergers or transfer of undertakings.

The Ministry of Corporate Affairs (MCA) has recently announced a major change that will make it easier and quicker for many businesses in India to merge or split their operations. On 4th September 2025, the MCA issued a notification [G.S.R. 603(E)] amending the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

This amendment widens the scope of “fast-track mergers and demergers” under Section 233 of the Companies Act, 2013. In simple terms, the government has decided to allow many more types of companies to use a simplified and quicker process for merging or restructuring their businesses.

If you are a business owner, start-up founder, or part of a group of companies, this change could save you time, money, and a lot of legal paperwork.

Let’s break down what this really means for you.

What is a Fast-Track Merger?

Under Indian company law, when two companies want to merge (combine) or when a company wants to demerge (split into two or more parts), they usually have to go through the National Company Law Tribunal (NCLT). This is a formal court-like process. While it works well, it can often be time-consuming and expensive.

To make things simpler, Section 233 of the Companies Act, 2013 introduced the concept of a “fast-track merger”.

A fast-track merger is a special, simplified procedure where companies can get their merger or demerger approved by the Regional Director of the MCA instead of going to the NCLT. This means:

Less paperwork
Shorter timelines
Lower costs

Until now, only a limited category of companies could use this fast-track route. These included:

Two or more small companies
A holding company and its wholly owned subsidiary
From 2021 onwards: start-ups (two or more start-ups, or a start-up merging with a small company)

From 2024 onwards: foreign holding company merging with its wholly owned Indian subsidiary (a process known as a “reverse flip”).

What Has Changed Now?

In her Budget 2025-26 speech, the Finance Minister announced that the government would further expand the scope of fast-track mergers and demergers.

Following consultations with stakeholders, the MCA has now amended the rules. With effect from 4th September 2025, more types of companies can now use the fast-track procedure.

Here are the key new categories of companies that can now merge or demerge through the fast-track process:

1.Unlisted Companies with Limited Borrowings

Two or more unlisted companies (private or public) can now merge through the fast-track route, provided:

Their total outstanding loans, debentures, or deposits do not exceed ₹200 crore, and
There is no default in repaying these borrowings.

Such companies will have to submit an auditor’s certificate in a new form called Form CAA-10A to confirm that they meet these conditions.

Form CAA-10A is attached here for reference:

This is great news for mid-sized companies that are too big to qualify as “small companies” but still want a quicker and cheaper merger route.

2.Mergers Between Holding Companies and Their Subsidiaries

Now, even if a holding company or its subsidiary is listed or unlisted, they can use the fast-track route as long as the transferor company (the one being merged) is not listed.

This means that large business groups can now restructure their group companies more easily, provided the merging company itself is not listed on a stock exchange.

3.Mergers Between Subsidiaries of the Same Holding Company

Two or more subsidiaries of the same holding company can now merge with each other through the fast-track process, again provided the transferor companies are not listed.

This will make internal reorganizations within big corporate groups much simpler.

4.Reverse Flip Mergers Continue

The rules continue to allow a foreign holding company to merge with its wholly owned Indian subsidiary (popularly known as a “reverse flip”).

This is particularly helpful for Indian start-ups that first incorporated abroad (for example in Singapore or the US) but now want to relocate back to India.

5.Fast-Track Process Now Covers Demergers Too

Until now, the fast-track process was mostly used for mergers. However, many companies also want to demerge—that is, split into separate entities or transfer a part of their business to another company.

In practice, Regional Directors were already allowing some demergers under the fast-track route, but there was no formal rule.

The new amendment clearly states that schemes of division or transfer of undertakings (demergers) can also be done through the fast-track process. This provides legal certainty and makes it easier for companies to plan spin-offs and reorganisations.

6.More Intimation to Regulators

The MCA has also tightened the intimation and transparency requirements.

Earlier, when a fast-track merger was proposed, the company only had to send a notice to the Registrar of Companies (RoC) and the Official Liquidator.

Now, the notice—Form CAA-9—must also be sent to sector regulators such as:

RBI (for NBFCs and banks),
SEBI (for market intermediaries),
IRDAI (for insurance companies), and
PFRDA (for pension fund managers), if the companies involved are regulated by these bodies.

If any of the companies involved is a listed company, the notice must also be sent to the stock exchanges where its shares are listed.

This ensures that regulators can raise objections or give inputs before the merger or demerger is approved.

7.Updated Forms and Procedures

The amendment has also introduced new and revised forms to simplify and standardise the process:

Form CAA-10 now needs to be filed as an attachment to Form GNL-1.
Form CAA-11 must now include a statement on how objections or suggestions from regulators and stock exchanges have been addressed.
New versions of Forms CAA-9, CAA-10, CAA-10A, CAA-11 and CAA-12 have been notified.

These updates bring more clarity and reduce procedural confusion for companies and their advisors.

Why This Matters to Businesses

These changes are a big positive step for the Indian business environment.

Mid-sized companies that were previously too large to qualify for the old fast-track system can now use a quicker and cheaper method to restructure.
Corporate groups can reorganise their subsidiaries or merge group companies without waiting months for NCLT approval.
Start-ups incorporated abroad now find it easier to “flip back” to India.
Companies planning a demerger can now use a legally recognised fast-track process.

Overall, the amendment will help companies save time, legal costs and effort, and will encourage more efficient corporate restructuring.

It is advisable to consult a company secretary, chartered accountant, or corporate lawyer before starting a fast-track merger or demerger.

Key Takeaways

The MCA’s September 2025 amendment is a strong signal of India’s commitment to ease of doing business. By widening the scope of fast-track mergers and officially covering demergers, the government has given businesses a powerful tool to restructure quickly and efficiently.

Wider eligibility: Fast-track mergers and demergers now cover unlisted mid-sized firms, holding–subsidiary combinations and mergers between sister subsidiaries.
Quicker restructuring: Companies can reorganise without going through the longer NCLT approval process, saving time and costs.
Demergers included: The simplified route now officially applies to division or transfer of undertakings as well.
Regulator oversight ensured: Notices must also be sent to regulators such as RBI, SEBI, IRDAI and PFRDA, and to stock exchanges where applicable.
Practical alternative: For many corporate groups and growing businesses, the expanded fast-track process offers a cost-effective and efficient option for restructuring.

The official notification is attached here for reference.

Need Expert Help?

Understanding the new fast-track merger and demerger rules can be tricky, and every business has its own unique requirements. If you are planning a merger, demerger, or group restructuring and want to know whether your company qualifies for the fast-track process, the experts at IndiaFilings can guide you at every step—from evaluating eligibility to preparing forms and getting approvals.

Book a Consultation with IndiaFilings today and let our professionals help you navigate the new MCA rules!

MCA Expands Fast-Track Mergers & Demergers Under Companies Act, 2013