New Delhi: The Ministry of Corporate Affairs (MCA) has broadened the scope of MCA Fast Track Mergers under the Companies Act, 2013, further simplifying procedures for corporate restructuring.
The move follows the Union Budget 2025–26 announcement to promote ease of doing business and provide more flexibility for unlisted and group companies.
MCA Fast Track Mergers: Evolution of the Framework
Section 233 of the Companies Act, 2013 allows certain classes of companies to undertake mergers or amalgamations through a fast-track process requiring approval of the Central Government, delegated to Regional Directors.
Initially, this provision was applicable only to mergers between two or more small companies, and between a holding company and its wholly-owned subsidiary.
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The scope of MCA Fast Track Mergers was first expanded in 2021 through amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (CAA Rules). These changes allowed mergers between two or more start-ups, as well as between start-ups and small companies.
In September 2024, the framework was further liberalized to permit reverse flipping—where a foreign holding company could merge with its wholly-owned Indian subsidiary under the fast-track procedure.
September 2025 Amendments to CAA Rules
Pursuant to Para 101 of the Budget Speech 2025–26, the MCA notified additional changes to the CAA Rules on September 4, 2025, after extensive stakeholder consultations.
The revised provisions under Rule 25 now extend fast-track eligibility to the following:
- Two or more unlisted companies (excluding Section 8 companies) that meet prescribed thresholds for loans, debentures, or deposits.
- Holding company and subsidiary companies, excluding cases where the transferor is a listed company.
- Two or more subsidiaries of the same holding company, excluding cases where the transferor is a listed company.
Impact of MCA Fast Track Mergers Expansion
The widened framework under the Companies Act, 2013 is expected to provide companies with quicker and more cost-effective restructuring options.
By extending the scope of MCA Fast Track Mergers to include unlisted entities and subsidiaries, the government aims to support corporate flexibility, ease of compliance, and improved business efficiency.
