The Ministry of Corporate Affairs (MCA) has issued Notification No. G.S.R. 603(E) on 4 September 2025, to further amend the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. These new regulations, titled the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, come into force on the date of their publication in the Official Gazette. The amendments are enacted under the powers conferred by sub-sections (1) and (2) of section 469, read with section 233 of the Companies Act, 2013.

Key Highlights of the Amendments

1. Revised Requirements for Scheme Notice (Rule 25(1)):

1. The notice for a proposed scheme under Section 233(1)(a) of the Companies Act, 2013, which invites objections or suggestions from the Registrar, Official Liquidator, or persons affected by the scheme, must now be in the newly substituted Form No. CAA.9.
2. Mandatory Notice to Sectoral Regulators and Stock Exchanges: For companies regulated by a sectoral regulator (such as the Reserve Bank of India, Securities and Exchange Board, Insurance Regulatory and Development Authority of India, or Pension Fund Regulatory and Development Authority), the notice must be issued to the concerned regulator. For listed companies, the notice must be issued to the respective stock exchanges for objections or suggestions within the specified period.

2. Expansion of Schemes under Section 233 (Rule 25(1A)): The amendments introduce new categories of companies and schemes that fall under Section 233, which typically allows for a fast-track merger or amalgamation process. These include:

1. Merger of Specific Unlisted Companies (New Clause (iii)): Mergers between one or more unlisted companies (not being Section 8 companies) with one or more other unlisted companies (not being Section 8 companies) are now covered, provided certain conditions are met:

• Each company involved must have, in aggregate, outstanding loans, debentures, or deposits not exceeding two hundred crore rupees.
• Each company must have no default in repayment of such loans, debentures, or deposits.
• These conditions must be met both within 30 days before the notice date under Section 233(1)(a) and on the date of filing the scheme under Section 233(2).
• Requirement for Auditor’s Certificate: A certificate from the company’s auditor, confirming that these conditions are met, must be filed in Form No. CAA-10A, along with the approved scheme.

2. Merger between a Holding Company and a Subsidiary Company (New Clause (iv)): This covers mergers between a holding company (listed or unlisted) and a subsidiary company (listed or unlisted). However, this provision does not apply if the transferor company or companies are listed.

3. Merger between Subsidiaries of the Same Holding Company (New Clause (v)): Schemes of merger or amalgamation or transfer or division between one or more subsidiary companies of a holding company with one or more other subsidiary companies of the same holding company are covered. This provision is applicable only where the transferor company or companies are not listed. An illustration clarifies that even indirect subsidiaries of the same ultimate holding company (e.g., Company C and D both subsidiaries of Company A) would be covered.

4. Cross-Border Merger of Foreign Holding with Indian WOS (New Clause (vi)): Mergers involving a transferor foreign company (incorporated outside India and being a holding company) with a transferee Indian company (its wholly-owned subsidiary incorporated in India) are now explicitly included, as referred to in sub-rule (5) of rule 25A.

3. Updated Filing Procedures (Rule 25(2) and (4)):

1. Filing of Declaration of Solvency (Form CAA.10): The declaration of solvency in Form No. CAA.10 must now be filed as an attachment to Form GNL-1.

2. Filing of Scheme Approval (Form CAA.11): The transferee company must, within fifteen days after the conclusion of the meeting of members or creditors, file a copy of the approved scheme, a report of the meeting results, and the registered valuer’s report in Form No. CAA.11 (as an attachment to Form RD-1) with the Central Government.

3. Addressing Regulatory Objections: For companies subject to sectoral regulators or stock exchanges (as per the proviso to sub-rule (1)), the filing of the scheme must include a statement on how any objections or suggestions from these regulators or exchanges have been addressed in the scheme.

4. Application to Division or Transfer of Undertaking (New Rule 25(9)):

1. The provisions of Rule 25 will now apply, with necessary modifications (mutatis mutandis), to a scheme of division or transfer of undertaking of a company as referred to in Section 232(1)(b) of the Act.

4. While passing such an order, the Central Government may make provisions similar to those specified in clauses (a) to (j) of Section 232(3) to the extent they are applicable.

5. Substitution of Forms in Annexure-A: The Annexure-A to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, has been updated, and new versions of Forms CAA-9, CAA-10, CAA-11, and CAA-12, along with the introduction of a new Form CAA-10A, have been substituted.
6. Form CAA.9 – Notice of the scheme inviting objections or suggestions: Details the information to be provided for inviting objections and suggestions.

2. Form CAA.10 – Declaration of solvency: Specifies the format for directors to declare the company’s solvency, including details of assets, liabilities, and auditor’s report.

3. Form CAA.10A – Certificate by the auditor: A new form for auditors to certify that a company meets the conditions specified in Rule 25(1A)(iii) for simplified mergers.

4. Form CAA.11 – Notice of approval of the scheme: To be filed by the transferee company, detailing the scheme, parties, and the process of approval by members and creditors.

5. Form CAA.12 – Confirmation order of scheme: The format for the confirmation order issued by the Central Government for the approved scheme.

6. Implications:
7. Streamlined Processes: These amendments aim to further streamline and simplify the process of compromises, arrangements, and amalgamations, particularly for specific categories of companies, by bringing them under the less cumbersome Section 233.

2. Enhanced Regulatory Oversight: The requirement to issue notices to sectoral regulators and stock exchanges signifies an increase in regulatory scrutiny and ensures that such schemes are aligned with broader regulatory frameworks.

3. Increased Compliance Burden for Specific Cases: The introduction of new forms like CAA-10A and the detailed requirements within the substituted forms (CAA.9, CAA.10, CAA.11) suggest a more structured approach to compliance and documentation for companies undertaking these schemes.

4. Clarity on Scope: The new clauses provide greater clarity on which types of inter-company and cross-border mergers can utilize the provisions of Section 233, thereby reducing ambiguity.

5. Extension to Divisions/Transfers: The application of Rule 25 provisions to schemes of division or transfer of undertakings broadens the scope of the simplified process beyond just mergers and amalgamations.

The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, represent a significant update to the regulatory framework governing corporate restructuring in India. By expanding the applicability of Section 233 and refining the associated procedural requirements and forms, the Ministry of Corporate Affairs aims to facilitate more efficient and transparent fast-track merger and arrangement processes while ensuring adequate regulatory oversight.