Sections 233 and 234 of the Companies Act, 2013: Fast-Track Merger and Cross-Border Merger

Updated: 17 September 2026

Sections 233 and 234 form part of Chapter XV of the Companies Act, 2013 dealing with compromises, arrangements and amalgamations. Section 233 provides a simplified or fast-track route for specified classes of companies. Section 234 governs mergers and amalgamations between an Indian company and a foreign company, subject to the Companies Act, the applicable rules and foreign-exchange law.

What is Section 233 of the Companies Act, 2013?

Section 233 - Merger or amalgamation of certain companies creates a procedure that operates notwithstanding Sections 230 and 232 for eligible companies. It is commonly called the fast-track merger route because qualifying schemes can be dealt with by the Central Government through the prescribed process rather than following the ordinary Tribunal route from the outset.

The statutory text of Section 233 originally identifies mergers between two or more small companies and between a holding company and its wholly owned subsidiary, and also permits the Central Government to prescribe additional classes. Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 prescribes the procedure and has been expanded by later amendments.

Important 2025 expansion: The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, notified through G.S.R. 603(E), widened Rule 25. In addition to the earlier eligible categories, the fast-track framework now covers specified unlisted-company combinations, holding-subsidiary combinations and fellow-subsidiary combinations, subject to the conditions in the amended rule. It also expressly covers the qualifying foreign-holding-company to Indian wholly owned subsidiary merger referred to in Rule 25A(5).

Companies eligible for the fast-track route

Section 233 read with Rule 25, as amended, includes the following principal categories:

  • two or more small companies;
  • a holding company and its wholly owned subsidiary company;
  • two or more start-up companies;
  • one or more start-up companies with one or more small companies;
  • one or more unlisted companies, other than Section 8 companies, with one or more such unlisted companies, where each company satisfies the prescribed financial and no-default conditions;
  • a holding company, listed or unlisted, and a subsidiary company, listed or unlisted, provided the transferor company or companies are not listed;
  • one or more subsidiary companies of a holding company with one or more other subsidiary companies of the same holding company, where the transferor company or companies are not listed; and
  • a qualifying merger of a foreign holding company into its Indian wholly owned subsidiary under Rule 25A(5).

For the specified unlisted-company category introduced in 2025, each company must have aggregate outstanding loans, debentures or deposits not exceeding Rs. 200 crore and must have no default in repayment of those amounts at the prescribed testing dates. The auditor certificate required by the amended rules is filed in Form CAA-10A.

Section 233 fast-track merger procedure

  1. Notice of proposed scheme: The companies issue notice in the prescribed Form CAA-9 inviting objections or suggestions from the Registrar, Official Liquidator and persons affected by the scheme. Where a company is regulated by a sectoral regulator, notice must also be issued to the concerned regulator; listed companies must also notify the relevant stock exchanges as prescribed.
  2. Members' approval: The scheme must be approved by the respective members or class of members at a general meeting by the statutory threshold under Section 233.
  3. Declaration of solvency: Each company involved files the prescribed declaration of solvency with the Registrar.
  4. Creditors' approval: The scheme requires approval by a majority representing nine-tenths in value of the creditors or class of creditors, at the prescribed meeting or in writing.
  5. Filing of approved scheme: The transferee company files the approved scheme and prescribed documents with the Central Government, Registrar and Official Liquidator in accordance with Section 233 and Rule 25.
  6. Consideration of objections: The Registrar and Official Liquidator may communicate objections or suggestions. If the Central Government considers the scheme contrary to public interest or the interest of creditors, it may apply to the Tribunal for consideration under Section 232.
  7. Registration and effect: On confirmation and registration, the statutory consequences under Section 233 follow, including dissolution of the transferor company without winding up and transfer of its property and liabilities to the transferee company.

Legal effects of registration under Section 233

Registration of a confirmed scheme results in dissolution of the transferor company without the process of winding up. The transferor company's property and liabilities pass to the transferee company; existing charges continue against the transferred property; and pending legal proceedings by or against the transferor company continue by or against the transferee company. Amounts payable for dissenting shareholders' shares or settlement of dissenting creditors' debt become liabilities of the transferee company to the extent unpaid.

The transferee company cannot retain its own shares arising from the merger in its own name or through a trust on behalf of itself, its subsidiary or associate; such shares are to be cancelled or extinguished as provided by Section 233. The transferee must also address the revised authorised capital and prescribed filing fees, with the statutory set-off for eligible fees already paid by the transferor company.

Can an eligible company still use Section 232?

Yes. Section 233 itself permits a company covered by the fast-track provision to use Section 232 for approval of a merger or amalgamation scheme. The fast-track route is therefore an available statutory route for qualifying cases, not an absolute bar on using the ordinary scheme procedure.

What is Section 234 of the Companies Act, 2013?

Section 234 - Merger or amalgamation of company with foreign company applies the provisions of Chapter XV, unless otherwise provided by another law, to schemes between companies registered under the Companies Act, 2013 and companies incorporated in notified foreign jurisdictions. The Central Government may make rules for such mergers in consultation with the Reserve Bank of India.

Section 234(2) permits a foreign company to merge into an Indian company or an Indian company to merge into a foreign company, subject to applicable law and the RBI framework. The merger consideration may include cash, Depository Receipts, or a combination, as provided by the scheme. For this provision, a foreign company means a company or body corporate incorporated outside India, whether or not it has a place of business in India.

Rule 25A and cross-border merger requirements

Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 supplements Section 234. Cross-border schemes must also comply with the Foreign Exchange Management Act, 1999 and the RBI's Foreign Exchange Management (Cross Border Merger) Regulations, 2018, as amended.

For the special case introduced in 2024 where the transferor is a foreign holding company and the transferee is its wholly owned Indian subsidiary, Rule 25A(5) requires prior RBI approval for both companies and directs the Indian transferee company to proceed under Section 233 and Rule 25. The 2025 amendment to Rule 25 expressly includes this category within the fast-track classes.

2026 RBI update: The Foreign Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026 replaced references to the NCLT in Regulations 4, 5, 7 and 9 with the broader expression Competent Authority, defined as an authority empowered under the Companies Act, 2013 or subordinate legislation to approve a merger or amalgamation scheme. This aligns the FEMA framework with merger routes that may be approved by an authority other than the NCLT.

Section 233 and Section 234 at a glance

ProvisionMain subjectKey point
Section 233Merger or amalgamation of certain companiesFast-track procedure for specified classes, read with Rule 25.
Section 234Merger or amalgamation with a foreign companyCross-border merger framework, read with Rule 25A and applicable FEMA/RBI rules.
Rule 25Fast-track procedurePrescribes forms, filings, eligible additional classes and procedural requirements.
Rule 25ACross-border mergersPrescribes additional requirements for mergers involving foreign companies.

Related provisions

Sections 230 to 232 contain the general framework for compromises, arrangements and mergers. Section 233 provides a simplified route for eligible classes, while Section 234 addresses the cross-border dimension. A transaction may also require compliance with sector-specific regulation, foreign-investment rules, securities law, competition law, tax law and other applicable legislation depending on the companies and transaction involved.

Note: This article is a general statutory overview. Merger eligibility, filing forms, regulatory approvals and foreign-exchange consequences should be checked against the law and notifications in force on the transaction date.