Fast Track Merger

Introduction

Simplified, Time-Bound Merger for Eligible Companies

A Fast Track Merger (FTM) is a simplified merger process introduced under Section 233 of the Companies Act, 2013, read with Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. It is designed to enable eligible classes of companies to merge without NCLT approval, thus saving time, cost, and regulatory burden.

Fast Track Merger

Legal Framework

Statutory Provision: Section 233, Companies Act, 2013

Applicable Rules: Rule 25, Companies (Compromises, Arrangements and Amalgamations) Rules, 2016

Regulatory Authorities Involved:

Registrar of Companies (ROC)

Regional Director (RD)

Official Liquidator (OL)

Income Tax Authorities

Shareholders and Creditors of the companies

Advantages of Fast Track Merger

No NCLT Approval

Avoids lengthy tribunal process

Quick Turnaround

Can be completed within ~90–120 days

Cost Effective

Lower compliance cost compared to regular merger

Simplified Compliance

Fewer regulatory layers, focused on ROC and RD

Ideal for Internal Restructuring

Useful for group companies, promoter-owned firms, or start-ups

Eligibility Criteria

The Fast Track Merger route is available only to the following classes of companies:

  • Two or more Small Companies
  • 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
  • Small Company: As per Section 2(85) of the Act
  • Start-Up: As defined by DPIIT and notified under the Act

Advantages of Fast Track Merger

Benefit Description

  • No NCLT Approval Avoids lengthy tribunal process
  • Quick Turnaround Can be completed within ~90–120 days
  • Cost Effective Lower compliance cost compared to regular merger
  • Simplified Compliance Fewer regulatory layers, focused on ROC and RD
  • Ideal for Internal Restructuring Useful for group companies, promoter-owned firms, or start-ups

Documents Required

Document Purpose

  • Draft Scheme of Merger Details terms of merger
  • Board Resolutions Approval of scheme
  • Declaration of Solvency (CAA-10) Confirm financial soundness
  • Auditor’s Report Certify solvency and creditors
  • List of Creditors Verified and certified
  • Notices to Authorities (CAA-9) Legal requirement
  • Shareholders/Creditors Resolutions Statutory approvals
  • Filing with RD (CAA-11, Affidavits) Formal application
  • RD Confirmation Order (CAA-12) Legal sanction
  • Filing with ROC (INC-28) Makes scheme effective

Approximate Timelines

Stage Timeline

  • Drafting & Board Approval 1 week
  • Filing CAA-10 & Notices 1 week
  • Waiting Period for Objections 30 days
  • Shareholders/Creditors Meetings 2–3 weeks
  • Filing with RD Within 7 days
  • RD’s Confirmation Within 15–60 days
  • Filing with ROC Immediately after RD approval
  • Entire process typically completes in 90–120 days, subject to smooth approvals.

Step 1

  • Board Meeting of Both Companies
  • Approve the draft Scheme of Merger
  • Approve issuance of notices to ROC, OL, and IT Department
  • Authorize professionals to handle filings

Step 2

  • Filing of Declaration of Solvency (Form CAA-10)
  • Both companies must file Form CAA-10 with ROC
  • Must be accompanied by:
  • Board resolution
  • Auditor’s certificate
  • Statement of assets & liabilities
  • Auditor-certified list of creditors (not older than 30 days)

Step 3

  • Issuance of Notice to Authorities (Form CAA-9)
  • Send notice of the scheme along with documents to:
  • Registrar of Companies
  • Official Liquidator
  • Income Tax Department
  • Authorities may give objections/suggestions within 30 days of receiving the notice.

Step 4

  • Approval by Shareholders and Creditors
  • Convene:
  • General meeting of shareholders → Must approve by 90% in number
  • Meeting of creditor’s → Must approve by majority in value
  • Both approvals are mandatory. Meetings may be held physically or via postal ballot/e-voting.

Step 5 

  • Filing of Scheme with Regional Director (RD)
  • Submit the final scheme and all documents to the RD within 7 days of shareholder and creditor approval.
  • Accompanied by:
  • Form CAA-11
  • Copy of scheme
  • CAA-10
  • Minutes of meetings
  • Affidavit of compliance
  • ROC/OL/IT Department comments, if received

Step 6

  • Regional Director's Review
  • No Objection: RD confirms the scheme within 15 days in Form CAA-12
  • Minor Objections/Suggestions: May be incorporated by mutual consent
  • Major Objection: RD may file an application with NCLT within 60 days

Step 7

  • Filing with ROC
  • After RD approval:
  • File Form INC-28 with ROC along with the approved scheme
  • Upon filing, the scheme becomes effective