In a welcome move, the Central Government has amended the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 vide notification dated 4th September 2025. With the implementation of these amendments, after implementation of this rule now we can see mor Black Coat (Advocates) in R.D Offices, Roc Offices and OL offices. However, Blue Coat (Company Secretaries) has also a good opportunity to show our strength in the same places. I opine that there shall be a little bit hurdle that earlier because of small companies, in general we didn’t get objection but the number of objection and question from regulatory will be high. It is also a step to reduce work load from the Hon’ble NCLT.
Key amendments introduced are as follows:
- Eligibility criteria
- Certification by the Auditor
- Introduction of Form CAA-10A
- Inclusion of the term “division” to provide clarity on demerger
- Prescribed time limit for filing Form RD-1
Eligibility
Earlier the scheme of merger or amalgamation may be entered between or in to following class of companies:
(i) two or more small companies or
(ii) between a holding company and its wholly-owned subsidiary company or
(iii) two or more start-up companies; or
(iv) one or more start-up company with one or more small company.
Now, one or more unlisted company (not being a Section 8 company) with one or more unlisted company (not being company referred to in section 8 of the Act), where every company involved in the merger,
(a) has, in aggregate, outstanding loans, debentures or deposits not exceeding two hundred crore rupees, and
(b) has no default in repayment of loans, debentures or deposits referred to in sub-clause (a)
Here is certification introduced from the auditor by newly inserted form CAA – 10A.
(v) holding company (listed or unlisted) and a subsidiary company (listed or unlisted):
Provided that this clause shall not apply where the transferor company or companies are listed;
(vi) one or more subsidiary company of a holding company with one or more other subsidiary company of the same
holding company where the transferor company or companies are not listed;
(vii) merger of the transferor foreign company incorporated outside India being a holding company with the transferee
Indian company being its wholly owned subsidiary company incorporated in India referred to in sub-rule (5) of rule 25A.
The list of happiness for professional does not end here. Time limit for filing of RD – 1 has been increased to 15 days.
Comparative Table: Earlier vs. Now
Here is a side-by-side summarization:
| Feature | Earlier Eligibility | New Eligibility & Changes |
| Small companies | Always eligible: mergers between two or more small companies. Holding-subsidiary (wholly-owned) also. | Retained, but now more categories added beyond that. |
| Startups | Yes: merger between start-ups; or startup + small company. | Still eligible. New categories do not restrict those. |
| Unlisted companies (other than Section 8) | Not generally permitted unless satisfy small or start-up criteria. | Now unlisted companies may merge fast-track if ≤ ₹200 crore debt etc., no default. |
| Holding & subsidiary | Only if wholly-owned subsidiary. | Now also where subsidiary may not be wholly owned (but transferor not listed). Broadens intra-group restructuring. |
| Subsidiaries of same holding company | Not permitted earlier under fast track (unless fits other categories). | Permitted under new rules (if transferor unlisted). |
| Foreign holding companies | Still permitted; now integrated into rules more clearly. | |
| Demergers / division / transfer of undertaking | Unclear, not explicitly covered. Some regional director discretion. | Now explicitly included under the fast-track regime. |
| Debt / financial thresholds, defaults | Not applicable in many earlier categories (small companies etc.). No fixed threshold or auditor certificate required in many cases. | New thresholds (₹200 crore), default condition, auditor certificate (Form CAA-10A). |
| Regulator / stock exchange notice / objections | Notices to ROC, OL, matters of members & creditors; regulator involvement only if relevant but not systematically required. | More systematic: regulated companies need notice to regulator; listed companies to stock exchanges; need to address any objections. |
| Forms / procedural detail | Standard forms under CAA Rules; earlier those specific ones (CAA-9, CAA-10 etc.). | Revised forms; addition of CAA-10A; more detailed procedural steps including filing timelines etc. |
Conclusion: This amendment can rightly be seen as a win–win situation for all stakeholders. For corporates, it ensures reduced time and cost in completing restructuring processes. For professionals, it widens the scope of practice and enhances opportunities to contribute meaningfully in the evolving regulatory environment. For the regulatory authorities, though the workload may initially appear intensive, the overall framework will streamline processes and deliver long-term benefits.
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