Startup companies may now amalgamate/merge with unlisted companies

Startup companies may now amalgamate/merge with unlisted companies – The Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025

The MCA has notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025 to amend 2016 Rules.

Rule 25 related to merger or amalgamation of certain companies has been modified which inter alia provides that notice of the proposed scheme, under clause (a) of sub-section (1) of section 233 of the Act, to invite objections or suggestions from the Registrar and official liquidator or persons affected by the scheme shall be in Form No. CAA-9.

It has been provided that in case of a company regulated by a sectoral regulator such as Reserve Bank of India, Securities and Exchange Board, Insurance Regulatory and Development Authority of India or Pension Fund Regulatory and Development Authority, as the case may be, the notice shall be issued to the concerned regulator and to respective stock exchanges, for listed companies, for objections or suggestions within the period specified in clause (a) of sub-section (1) of section 233.

Further the classes of companies eligible for merger/amalgamation has been widened to provide for merger/amalgamation;

(i) between a startup company apart from small company, and one or more unlisted company, (not being company referred to in section 8 of the Act) with one or more unlisted company, (other than section section 8 company), 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. (ii) Holding company (listed or unlisted) may also amalgamate/merge with a subsidiary company and (iii) 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; (iv) 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.

Also, the time limit for filing copy of the scheme as agreed with Central Government has also been increased from 7 days to 15 days from the conclusion of the meeting.

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