Section 233 of the Companies Act, 2013 provides a fast-track route for mergers, approved by the Regional Director instead of the National Company Law Tribunal. Until recently it was available only to small companies, start-ups and wholly-owned subsidiaries. The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, effective 4 September 2025, have widened it substantially.
Newly eligible combinations
- A holding company (listed or unlisted) with any of its subsidiaries, provided the transferor is not listed.
- Two or more subsidiaries of the same holding company, provided the transferor is not listed.
- Unlisted companies, other than Section 8 companies, whose outstanding loans, debentures and deposits do not exceed ₹200 crore and which have no repayment default.
- Demergers are now expressly covered.
The process
The scheme is approved by the board of each company and notified to the Registrar of Companies, the Official Liquidator and other affected regulators, who may object within 30 days. A declaration of solvency is filed. Members holding 90% of the total shares and creditors representing nine-tenths in value must approve. The scheme is then filed with the Regional Director for confirmation.
Points to plan for
The 90% shareholder threshold can be difficult in widely held companies. Tax neutrality, stamp duty and accounting for common-control mergers also need attention from the start.
Our view
Group restructurings deferred because of NCLT timelines should be revisited. For pre-IPO clean-ups and reverse flips in particular, the fast-track route can save many months.