Section 233 of the Companies Act, 2013
Section 233 of the Companies Act, 2013 provides for a fast-track merger or amalgamation process for certain categories of companies.
✅ Section 233 – Fast Track Merger or Amalgamation
Objective:
To simplify and speed up the merger/amalgamation process for small companies and certain other classes without going through the lengthy NCLT approval.
🏢 Applicable To:
Fast-track merger is allowed between:
Two or more small companies
Holding company and its wholly-owned subsidiary
Startups (as notified)
Such other class of companies as may be prescribed
📝 Key Provisions & Process:
Board Approval:
Both companies must approve the scheme of merger via Board resolution.
Notice to Authorities:
The companies must send the scheme to:
The Registrar of Companies (ROC)
The Official Liquidator
The Income Tax Department
Shareholder & Creditor Approval:
The scheme must be approved by:
At least 90% of shareholders (in value)
At least 9/10th in value of creditors or class of creditors
No Objection:
If ROC or Official Liquidator has no objections, the scheme is registered and comes into effect without NCLT approval.
Objection Raised:
If ROC or OL raises objections and the Central Government thinks the scheme is not in public interest, it can refer the matter to the NCLT.
Filing of Scheme:
Once approved, the scheme must be filed with the ROC, and it becomes effective.
📌 Advantages of Section 233:
No need for NCLT hearing if there are no objections
Faster and cost-effective for eligible companies
Less regulatory burden
⚖️ Example:
If a small IT startup wants to merge with its wholly-owned subsidiary, they can use Section 233 for a fast-track merger, avoiding long NCLT processes.
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