The Ministry of Corporate Affairs (MCA) has widened the scope of fast-track mergers under the Companies Act, 2013 to further improve ease of doing business and support small and emerging enterprises.

Section 233 of the Companies Act, 2013 allows mergers and demergers between specified classes of companies through a simplified fast-track process, which requires approval from the Central Government (delegated to Regional Directors). Initially, this provision applied to mergers between small companies and between holding companies and their wholly owned subsidiaries.

Over time, the scope has been expanded through amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. In 2021, start-ups were allowed to use the fast-track route, followed by a 2024 amendment permitting reverse flipping—mergers involving a foreign holding company and its wholly owned Indian subsidiary.

In line with the Union Budget 2025–26 announcement, the MCA notified further amendments to the CAA Rules on September 4, 2025 after stakeholder consultations. The updated rules now extend the fast-track merger or demerger process to:

Two or more unlisted companies (other than Section 8 companies) meeting prescribed thresholds for loans, debentures or deposits.

Mergers between holding companies and their subsidiaries, except where the transferor is listed.

Mergers between two or more subsidiaries of the same holding company, except where the transferor is listed.

The move is expected to significantly streamline corporate restructuring, reduce timelines, and enhance the ease of doing business in India.