The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 lay down the procedure for mergers, amalgamations, and arrangements involving companies under the Companies Act, 2013. The Ministry of Corporate Affairs (MCA), through its notification dated 9th September 2024, amended the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, with effect from 17th September 2024. These rules govern both domestic and cross-border corporate restructuring, ensuring compliance with Indian law, regulatory approvals, and protection of stakeholders’ interests.
A new sub-rule (5) under Rule 25A requires both entities to obtain prior approval from the Reserve Bank of India (RBI) before initiating the process. It further mandates that the Indian transferee company comply with Section 233 of the Companies Act, 2013, and file the application with the Central Government under the same section. The rule also clarifies that the declaration under sub-rule (4) must be furnished at the time of making the application.
These changes strengthen regulatory oversight, streamline compliance requirements, and provide greater clarity for cross-border mergers involving foreign holding companies and Indian subsidiaries, ensuring alignment with both RBI regulations and the Companies Act, 2013.