SALIENT FEATURES OF MCA’S FAST TRACK MERGER GUIDELINES SIMPLIFIED, FAST-TRACK MERGER PROCESS (REQUIRING APPROVAL OF ONLY REGIONAL DIRECTOR, MCA INSTEAD OF NCLT):

 SALIENT FEATURES OF MCA’S FAST TRACK MERGER GUIDELINES  

SIMPLIFIED, FAST-TRACK MERGER PROCESS

(REQUIRING APPROVAL OF ONLY REGIONAL

DIRECTOR, MCA INSTEAD OF NCLT): 

NO MORE NCLT APPROVAL IS REQUIRED – APPROVAL FROM REGIONAL DIRECTOR, MCA ONLY 

FAST-TRACK MERGERS / DEMERGERS UNDER SECTION 233 OF THE COMPANIES ACT, 2013 

The Ministry of Corporate Affairs (MCA) has issued a notification dt. 4th September, 2025 to widen the scope of fast-track mergers / demergers under Section 233 of the Companies Act, 2013.  
 
The following categories of MERGERS / AMALGAMATIONS / DEMERGERS have now been included under Rule 25, making them eligible for a SIMPLIFIED, FAST-TRACK PROCESS (REQUIRING APPROVAL OF ONLY REGIONAL DIRECTOR, MCA INSTEAD OF NCLT): 
 
1.       Unlisted-to-Unlisted Company (excluding Section 8 company) merger / demerger:  
 
a.      Criteria for all companies (measured not more than 30 days before the date of notice to authorities & on the date of filing of the application with RD):  
 
Total loans, debentures or deposits does not exceed Rs. 200 crores and no default in repayment of such borrowings (certification required from company’s auditor). 
 
2.       Holding - Subsidiary merger / demerger: 
 
a.      Criteria: Allowed whether listed or unlisted - however, transferor company should be unlisted. 
 
3.       Fellow subsidiaries merger / demerger: 
 
a.       Criteria: The companies should be subsidiaries of the same holding company and transferor company should be unlisted. 
 
4.       Cross-border merger / demerger:  
 
a.       Criteria: Merger / demerger of Foreign Parent into Indian wholly owned subsidiary. 
 

FINAL THOUGHTS 
 

The scope of fast-track mergers / demerger has now been substantially expanded. This will help in improving ease of doing business since Fast track route has defined timeline for disposal of the matter by Regional Director, MCA. It can now be used for internal group restructuring of corporate houses without the hassle of NCLT. Lastly, the increase of the borrowings threshold to Rs. 200 crores makes the Fast track route accessible to large universe of companies. 

 

Courtesy : MR. SANDEEP LAKHOTIA 

R V SECKAR FCS,LLB 79047 19295

ROC IMPOSED PENALTY FOR FAILURE TO CONFIRM THE CIRCULAR RESOLUTION PASSED IN THE NEXT BOARD MEETING

 ROC IMPOSED PENALTY FOR FAILURE TO CONFIRM THE CIRCULAR RESOLUTION PASSED IN  THE NEXT BOARD MEETING 

FLUENCE BESS INDIA PVT LTD  VS ROC , DELHI  

SECTION 175(2) OF THE COMPANIES ACT, 2013 

Section 175(2) of the Companies Act, 2013, requires that any resolution passed by circulation must be noted at the next meeting of the board or its committee and made a permanent part of that meeting's minutes.   

NOT NOTED IN THE NEXT BOARD MEETING 

In this case,  a Circular Resolution passed in March 2023 by FLUENCE BESS but not noted in the next Board Meeting until December 2023 .Thus ,there is a technical miss under Section 175(2) of the Companies Act, 2013. 

Section 175(2) ensures that approved circular resolutions are formally ratified and documented in the minutes of the next immediate board meeting. 

The Company has Suo-moto applied for adjudication in e-form GNL-1. 
 

OUTCOME  

ROC, Delhi penalized the company and the officials as follows: 

₹99,000 penalty on the company 
₹50,000 penalty on each officer in default 
Officers must pay personally the penalty levied on them  
Disclosure mandated in the next Board Report. 

CONCLUDING REMARKS 

Lesson: Learned  

 Procedural compliance is to be adhered compulsorily. 

 It’s the fundamental of good corporate governance. 

 A missed minute can lead to a major issue for the company later. 

 A delayed noting of minute can trigger a financial burden on the company . 

R V SECKAR FCS,LLB 79047 19295