Fast Track Merger- finally on a faster track

– Barsha Dikshit, Partner |

The objective of promoting ‘ease of doing business in India’ had made the Ministries introduce some really momentous concepts and corresponding changes in law. One of such moves taken by the Ministry of Corporate affairs (‘MCA’), was introduction of section 233 of the Companies Act, 2013 (‘Act’) dealing with “Merger and amalgamation of certain types of companies” vide notification dated 7th December, 2016, [1] thereby offering an alternative mode to certain classes of companies for entering into scheme of merger or amalgamation. The idea was to process the scheme of arrangements involving wholly owned subsidiaries or small companies in a cost effective and comparatively swift way. However, upon the practical implementation of the provision, it was seen that the time taken by the authorities for disposal of such applications and issuing confirmation orders to the schemes was longer than expected and therefore, the provision was losing its relevance.

It is in the backdrop of such delays, MCA, vide notification dated 15th May, 2023 (yet to be published in e-gazette) has introduced certain amendments in the Companies (Compromise, Arrangements, and Amalgamations) Rules, 2015 (‘CAA Rules’) ensuring faster disposal of applications u/s 233 of the Act. The amendments shall be effective w.e.f. 15th June, 2023.

This article intends to discuss the amendments introduced by MCA and to gauge the effectiveness of the same.

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