Fast Track Merger in India under Section 233

A Fast Track Merger in India is a simplified mechanism for merger, amalgamation and certain corporate restructuring transactions under Section 233 of the Companies Act, 2013.

Unlike a regular merger under Sections 230 to 232, which generally requires proceedings before the National Company Law Tribunal (NCLT), an eligible fast-track merger is primarily approved by the Central Government through the Regional Director (RD).

The mechanism can therefore provide eligible companies with a comparatively faster and less complex method of restructuring their businesses.

Companies considering acquisitions, mergers or strategic restructuring may also explore our Mergers & Acquisitions Advisory Services in India.

What Is a Fast Track Merger?

A fast track merger is a simplified merger procedure available to specified classes of companies under Section 233 of the Companies Act, 2013 read with Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

The principal advantage is that eligible transactions can generally be completed through approval of the Regional Director instead of following the normal NCLT merger process.

The fast-track mechanism is particularly useful for:

• internal group restructuring;
• consolidation of subsidiaries;
• merger of small companies;
• restructuring of start-ups;
• simplification of corporate structures;
• elimination of duplicate entities;
• consolidation of operations; and
• certain eligible reorganisations involving unlisted companies.

Who Is Eligible for Fast Track Merger in India?

The scope of Section 233 has expanded significantly since its introduction.

Subject to satisfaction of the prescribed conditions, the fast-track merger mechanism may be available for transactions involving:

• two or more small companies;
• a holding company and its wholly owned subsidiary;
• two or more start-up companies;
• one or more start-up companies with one or more small companies;
• qualifying unlisted companies;
• eligible holding company and subsidiary company combinations;
• two or more eligible subsidiaries of the same holding company; and
• certain mergers involving a foreign holding company and its wholly owned Indian subsidiary.

Eligibility should always be examined before starting the transaction because different categories may be subject to additional financial, corporate or regulatory conditions.

Major Expansion of Fast Track Merger Rules in 2025

The scope of the fast-track merger mechanism was substantially expanded through amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 notified on 4 September 2025.

The expanded framework allows additional classes of companies to use the simplified merger or demerger mechanism.

Qualifying Unlisted Companies

Two or more unlisted companies, other than Section 8 companies, may use the fast-track mechanism where they satisfy the prescribed financial conditions relating to outstanding loans, debentures or deposits and other applicable requirements.

This significantly increases the usefulness of Section 233 for privately held corporate groups.

Holding and Subsidiary Companies

The fast-track route has also been widened for eligible mergers between holding and subsidiary companies.

Accordingly, the mechanism is no longer relevant only to the traditional merger of a holding company with its wholly owned subsidiary.

The applicable conditions should, however, be reviewed carefully, particularly where any transferor company is listed.

Fellow Subsidiaries

Two or more eligible subsidiary companies belonging to the same holding company can also undertake restructuring through the fast-track mechanism.

This can help corporate groups consolidate multiple entities and simplify their legal structure.

For broader transaction structuring and acquisition support, see our Business Buy Sell Advisory Services.

Fast Track Merger vs Regular Merger

A regular merger generally proceeds under Sections 230 to 232 of the Companies Act, 2013 and involves approval of the NCLT.

A fast-track merger under Section 233, on the other hand, is designed for specified categories of companies and is principally dealt with by the Regional Director.

The fast-track route may therefore offer:

• reduced procedural complexity;
• comparatively quicker processing;
• less dependence on NCLT proceedings;
• lower restructuring cost;
• simpler approval mechanism; and
• faster consolidation of group companies.

However, fast-track merger is not available automatically merely because companies are privately held.

The eligibility provisions and transaction structure must first be reviewed.

Fast Track Merger Procedure in India

The exact procedure will depend upon the nature of the companies and transaction, but the broad process generally involves the following stages.

Preliminary Review and Transaction Planning

Before beginning the merger process, the companies should evaluate:

• eligibility under Section 233;
• corporate structure;
• shareholding;
• outstanding loans and liabilities;
• creditors;
• regulatory approvals;
• tax implications;
• FEMA implications where foreign investment exists;
• valuation requirements; and
• proposed accounting and share exchange treatment.

The appropriate merger route should be finalised only after this preliminary review.

Preparation of Scheme of Merger

A detailed Scheme of Merger or Amalgamation is prepared setting out the commercial and legal terms of the transaction.

The scheme generally addresses matters such as:

• appointed date;
• effective date;
• transfer of assets;
• transfer of liabilities;
• treatment of employees;
• pending legal proceedings;
• contracts and licences;
• treatment of shares;
• issue or cancellation of shares;
• share exchange ratio, where applicable;
• authorised share capital;
• accounting treatment; and
• other consequential matters.

Where determination of consideration or a share exchange ratio is required, an independent valuation may also be necessary.

EzyBiz India can coordinate the valuation process as part of its Business Valuation Services.

Board Approval

The Board of Directors of the transferor and transferee companies considers and approves the proposed Scheme of Merger.

The Board may also authorise directors or officers to complete the necessary statutory filings and regulatory formalities.

Notice of Proposed Scheme – Form CAA-9

After approval of the proposed scheme, notice is issued in the prescribed Form CAA-9 inviting objections or suggestions from the prescribed authorities and persons.

Depending upon the circumstances, notice may be given to authorities including:

• Registrar of Companies;
• Official Liquidator;
• sectoral regulators, where applicable; and
• other persons affected by the scheme.

The authorities are provided the prescribed period for submitting their objections or suggestions.

Declaration of Solvency – Form CAA-10

Each company involved in the fast-track merger is required to file a Declaration of Solvency in Form CAA-10 with the concerned Registrar of Companies.

The declaration is an important safeguard under the simplified merger mechanism.

The companies should therefore review their financial position, assets and liabilities before making the declaration.

Approval by Members

The proposed scheme must obtain the prescribed approval of shareholders.

Under Section 233, approval is generally required from members holding at least 90% of the total number of shares.

Proper notices, explanatory documents and the Scheme of Merger should be provided to the members in accordance with applicable requirements.

Approval by Creditors

The scheme must also receive approval from creditors representing the prescribed majority.

Generally, approval of creditors representing at least 90% in value is required.

Where creditors representing the requisite value give their approval in writing, a separate creditors’ meeting may be dispensed with subject to compliance with the prescribed conditions.

Filing of Approved Scheme With Regional Director

After shareholder and creditor approvals have been obtained, the transferee company submits the approved scheme and prescribed documents to the Regional Director, together with the relevant filings before the Registrar of Companies and Official Liquidator.

The filing normally includes the report of the result of the meetings in the prescribed Form CAA-11, along with supporting documents.

Examination by Regional Director

The Regional Director examines the proposed scheme together with:

• shareholder approvals;
• creditor approvals;
• Registrar of Companies’ report;
• Official Liquidator’s report;
• regulatory comments;
• objections or suggestions received; and
• other relevant documents.

The Regional Director considers whether the merger is in the public interest and in the interest of creditors.

Further clarification or documents may be requested where required.

Approval of Fast Track Merger

Where the Regional Director is satisfied with the scheme and applicable requirements have been complied with, confirmation of the scheme may be issued in the prescribed manner, including Form CAA-12, as applicable.

However, if serious objections or concerns arise, the matter may in appropriate circumstances be referred for consideration through the NCLT process.

Filing of Order With Registrar of Companies

After confirmation of the scheme, the prescribed order must be filed with the Registrar of Companies through the applicable MCA filing mechanism, including Form INC-28, within the prescribed period.

Post-merger corporate, tax, accounting and regulatory compliances should thereafter be completed.

Important Forms in a Fast Track Merger

Some important forms generally associated with a fast-track merger include:

Form CAA-9 – Notice of proposed scheme inviting objections or suggestions.

Form CAA-10 – Declaration of Solvency.

Form CAA-11 – Report of the result of meetings and approval of the scheme.

Form CAA-12 – Confirmation order of the scheme, as applicable.

Form INC-28 – Filing of the order with the Registrar of Companies.

Companies should verify the latest MCA filing requirements and applicable e-forms at the time of undertaking the transaction.

For official corporate filings and notifications, businesses may refer to the Ministry of Corporate Affairs (MCA).

Effect of Registration of Fast Track Merger

Once the merger becomes effective in accordance with the approved scheme and statutory requirements, several legal consequences may follow.

Transfer of Assets and Liabilities

Property, assets, rights and liabilities of the transferor company are transferred to or vest in the transferee company in accordance with the approved scheme.

Dissolution of Transferor Company

The transferor company may be dissolved without undergoing a separate winding-up process.

Existing Charges

Charges over the assets of the transferor company generally continue and become enforceable against the relevant property transferred to the transferee company.

Legal Proceedings

Legal proceedings pending by or against the transferor company may continue by or against the transferee company in accordance with the approved scheme.

Treatment of Shares

A transferee company cannot, as a result of the merger, continue to hold its own shares either directly or through prescribed arrangements.

Such shares are required to be cancelled or extinguished in accordance with law.

Authorised Share Capital

The authorised share capital of the companies may also be dealt with as part of the merger scheme, subject to the applicable provisions and payment or adjustment of prescribed filing fees.

Fast Track Merger for Group Restructuring

The expanded Section 233 framework has made fast-track mergers increasingly relevant for corporate groups.

For example, a group operating similar businesses through several subsidiaries may consider consolidating those businesses into fewer entities.

Potential commercial benefits may include:

• reduction in administrative duplication;
• lower annual compliance costs;
• consolidation of management;
• improved utilisation of assets;
• simplified financial reporting;
• elimination of inter-company balances;
• consolidation of employees and contracts;
• simplified ownership structure; and
• improved readiness for future investment or sale.

The commercial and tax implications should nevertheless be evaluated before finalising the structure.

Fast Track Merger for Foreign-Owned Companies

Foreign-owned Indian companies considering a merger should evaluate the Companies Act provisions together with applicable FEMA and RBI regulations.

Depending upon the structure, issues may arise concerning:

• foreign shareholding;
• issue or cancellation of shares;
• pricing guidelines;
• sectoral limits;
• downstream investment;
• foreign investment reporting;
• transfer of foreign assets or liabilities; and
• regulatory approvals.

Our FEMA Compliance and Advisory Services can assist foreign investors and Indian companies in evaluating these requirements.

Companies undertaking Indian corporate restructuring may also refer to guidance and regulations issued by the Reserve Bank of India (RBI) where FEMA implications arise.

Reverse Flipping Through Fast Track Merger

The fast-track framework has also been extended to facilitate certain mergers involving a foreign holding company and its wholly owned subsidiary in India.

This has particular relevance for start-ups and international corporate groups considering reverse flipping, where overseas ownership structures are reorganised and the business is brought into an Indian corporate structure.

Such transactions require careful consideration of:

• Companies Act requirements;
• FEMA regulations;
• valuation;
• taxation;
• foreign assets and liabilities;
• shareholding;
• intellectual property; and
• other cross-border regulatory issues.

Companies contemplating cross-border restructuring should obtain transaction-specific professional advice before implementation.

Due Diligence Before a Fast Track Merger

Although Section 233 provides a simplified merger mechanism, proper due diligence remains important.

A pre-merger review may cover:

• incorporation and corporate records;
• share capital and shareholding;
• statutory registers;
• material contracts;
• borrowings and charges;
• tax liabilities;
• GST matters;
• income-tax assessments;
• employee liabilities;
• PF and ESI compliances;
• litigation;
• intellectual property;
• licences and approvals;
• related-party transactions;
• FEMA matters;
• contingent liabilities; and
• other regulatory issues.

Read more about our Due Diligence Advisory Services.

Tax Considerations in a Fast Track Merger

Companies should evaluate the tax consequences of a proposed merger before finalising the scheme.

Important areas may include:

• conditions for tax-neutral amalgamation;
• carry-forward of losses;
• depreciation;
• transfer of assets;
• capital gains;
• tax cost of assets;
• GST implications;
• treatment of accumulated reserves;
• withholding-tax matters; and
• availability of tax benefits after restructuring.

Tax treatment depends on the facts and nature of each merger and should therefore be examined separately.

When Should Companies Consider a Fast Track Merger?

A fast-track merger may be worth considering where companies wish to:

• consolidate subsidiaries;
• simplify an unnecessarily complex group structure;
• merge companies conducting similar activities;
• reduce recurring compliance expenditure;
• combine resources and employees;
• eliminate dormant operating entities;
• prepare a corporate group for investment;
• restructure before fundraising;
• consolidate businesses before an eventual sale; or
• undertake other eligible internal reorganisations.

Where the purpose of the transaction is acquisition or sale rather than merely internal restructuring, companies may also consider our Business Buy Sell Advisory Services and our guide to Business for Sale in India.

How EzyBiz India Can Assist

EzyBiz India Consulting LLP assists Indian companies, promoters, start-ups and foreign-owned companies with mergers, acquisitions and corporate restructuring.

Our assistance may include:

• evaluating eligibility for Section 233;
• identifying the appropriate merger route;
• structuring the transaction;
• preparation and review of the Scheme of Merger;
• corporate approvals;
• coordination for valuation;
• review of financial and tax implications;
• preparation and coordination of statutory documentation;
• ROC and Regional Director compliances;
• FEMA and cross-border review;
• due diligence;
• post-merger compliance; and
• overall transaction coordination.

For larger or strategic transactions, visit our Mergers & Acquisitions Advisory Services in India.

Frequently Asked Questions

What is a fast track merger in India?

A fast track merger is a simplified mechanism available to specified categories of companies under Section 233 of the Companies Act, 2013. Eligible transactions are generally approved through the Regional Director instead of following the regular NCLT merger process.

Which companies are eligible for fast track merger?

Eligibility includes prescribed categories such as small companies, start-ups, certain holding and subsidiary companies, qualifying unlisted companies and certain companies forming part of the same corporate group. Eligibility should be checked under the latest Section 233 and Rule 25 requirements.

Is NCLT approval required for a fast track merger?

An eligible fast-track merger is ordinarily processed through the Central Government acting through the Regional Director rather than through the regular NCLT route. In certain circumstances, however, a matter may be referred for consideration under the NCLT mechanism.

What percentage of shareholder approval is required?

The scheme generally requires approval from members holding at least 90% of the total number of shares, subject to the applicable statutory requirements.

What creditor approval is required?

Creditors representing at least 90% in value are generally required to approve the scheme in accordance with Section 233.

Is a Declaration of Solvency required?

Yes. The participating companies are required to make the prescribed Declaration of Solvency in Form CAA-10.

Can two subsidiaries of the same holding company merge under Section 233?

Yes, eligible subsidiaries of the same holding company may use the expanded fast-track merger framework, subject to satisfaction of the prescribed conditions.

Can unlisted companies undertake a fast track merger?

Qualifying unlisted companies may use the fast-track route subject to the prescribed eligibility and financial conditions.

Can a foreign holding company merge with its Indian subsidiary?

Certain mergers of a foreign holding company with its wholly owned Indian subsidiary may use the fast-track framework, subject to satisfaction of Companies Act, FEMA and other applicable regulatory conditions.

Is valuation required for a fast track merger?

Valuation requirements depend upon the structure of the transaction, consideration and share exchange mechanism. Where shares are to be issued or an exchange ratio needs to be determined, appropriate valuation should generally be considered.

How long does a fast track merger take?

There is no single timeline applicable to every transaction. The overall time depends upon preparation of the scheme, shareholder and creditor approvals, regulatory responses, completeness of filings and processing by the Regional Director.

Is fast track merger always better than an NCLT merger?

Not necessarily. The appropriate route depends upon eligibility, group structure, regulatory issues, creditors, tax considerations and commercial objectives. The transaction should be evaluated before selecting the merger route.

Related Services

• Mergers & Acquisitions Advisory Services in India
• Business Buy Sell Advisory Services
• Due Diligence Advisory Services
• Business for Sale in India
• Business Valuation Services
• Corporate Finance Advisory Services
• India Market Entry Consulting

Prepared By:
EzyBiz India Consulting LLP – Chartered Accountants & Business Advisors

Last Updated:
August 2026

Disclaimer:
This content is intended for general informational purposes only and does not constitute legal, tax, accounting or investment advice. Eligibility and compliance requirements for a fast-track merger depend upon the facts, corporate structure and applicable law in each case. Companies should obtain professional advice before implementing any merger, amalgamation, demerger or corporate restructuring.