By Dr. Anup P. Shah, Chartered Accountant
INTRODUCTION
Mergers are governed by the provisions of the Companies Act, 2013 (“the Act”). A traditional merger of two or more companies involves obtaining permission from the National Company Law Tribunal (“the NCLT”). However, the Companies Act also contains a provision for fast-track mergers that shortens the approval process for mergers. This Article examines these provisions and the recent developments that have taken place in this respect.
PROVISION FOR MERGERS
Sections 230 to 232 of the Act deal with compromises, arrangements and amalgamations between a company and its members/creditors. These constitute the provisions governing traditional mergers and require the companies to obtain permission of the NCLT for the merger. The Companies (Compromises, Arrangements and Amalgamations) Rules 2016 (“the Rules”) have prescribed the procedure under the Act. The Finance Minister in her Budget Speech for 2025–2026 stated that “Requirements and procedures for speedy approval of company mergers will be rationalised. The scope for fast-track mergers will also be widened and the process made simpler”.
