The Ministry of Corporate Affairs (MCA) has amended the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, to broaden the eligibility for fast-track mergers.
This change, effective immediately, allows a wider range of companies, particularly small and medium-sized enterprises (SMEs), to utilize the expedited merger process under Section 233 of the Companies Act, 2013.
Previously, the fast-track merger facility was limited to specific scenarios, such as mergers between small companies or between a holding company and its wholly-owned subsidiary. The new rules expand this to include unlisted companies with borrowings under ₹200 crore and no repayment defaults. Notably, the relaxed rules do not apply to non-profit entities under Section 8 of the Companies Act. The amendment aims to streamline corporate restructuring processes, facilitating quicker internal reorganisations for eligible companies.
This expansion aligns with the government’s 2025-26 Budget objectives to ease corporate restructuring norms. By increasing the number of companies eligible for fast-track mergers, the MCA seeks to reduce procedural delays and encourage efficient consolidation within the corporate sector.