ABC Ltd., a company registered under the Companies Act, 2013, providing Information Technology & allied services, wants to merge with its USA based wholly owned holding company, Silicon Valley Inc. Managing Director

In exercise of the powers conferred under section 469 read with sections 233 and 234 of the Companies Act, 2013, the Central Government has notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024 which shall come into effect from 17th day of September, 2024. In the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, in rule 25A, after sub-rule (4), the following sub-rule shall be inserted, namely: Where the transferor foreign company incorporated outside India being a holding company and the transferee Indian company being a wholly owned subsidiary company incorporated in India, enter into merger or amalgamation, - both the companies shall obtain the prior approval of the Reserve Bank of India; the transferee Indian company shall comply with the provisions of section 233; the application shall be made by the transferee Indian company to the Central Government under section 233 of the Act and provisions of rule 25 shall apply to such application; and the declaration referred to in sub-rule (4) shall be made at the stage of making application under section 233 of the Act." The Ministry of Corporate Affairs (MCA) has introduced a sub-rule to fast-track the approval process for the merger of a startup incorporated outside India into its wholly owned Indian subsidiary. The foreign holding company and its wholly owned Indian subsidiary will only need to obtain approval from the Reserve Bank of India (RBI) for such mergers or amalgamations, eliminating the need for clearance from the National Company Law Tribunal (NCLT).