Question

Section 233 of the Companies Act, 2013, deals with “fast track merger”. What is the time duration and the concerned authority for approval?

• A. 1 Year, Regional Director
• B. 60–90 Days, Regional Director
• C. 60–90 Days, NCLT
• D. 45–90 Days, NCLAT

Hint:

Remember: "Fast Track" means bypassing the NCLT. If you see a question about Section 233, always look for "Regional Director" and the "60–90 days" window!

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
Section 233 of the Companies Act, 2013, simplifies the merger process for certain classes of companies (like small companies or holding-subsidiary companies) to avoid the long NCLT process.

Step 2: Key Formula or Approach:
Identify the expedited procedural timelines and the specific regulatory authority empowered to approve these mergers under the "fast track" provision.

Step 3: Detailed Explanation:
Unlike standard mergers that require NCLT approval, fast track mergers under Section 233 are approved by the Central Government.
The power has been delegated to the Regional Director.
The scheme of merger must be approved within a timeline of 60 to 90 days after filing the necessary documents, ensuring a much faster resolution than standard proceedings.

Step 4: Final Answer:
The fast track merger requires approval from the Regional Director within 60–90 days. Thus, (B) is correct.

Answer 2

Section 233 was introduced to give certain companies, such as small companies and holding-subsidiary pairs, a simplified route to merge without going through the regular tribunal process. To answer this question correctly we need to get both parts right: the authority that approves the scheme, and the time within which it does so.

1. 1 Year, Regional Director: The authority named here, the Regional Director, is correct, but a full year defeats the entire purpose of a "fast track" scheme. The whole point of Section 233 is to compress the timeline, so this option is wrong on the duration.
2. 60-90 Days, Regional Director: This gets both elements right. The Central Government's power under Section 233 has been delegated to the Regional Director, who is expected to communicate approval, or objections, within roughly 60 to 90 days of the scheme being filed.
3. 60-90 Days, NCLT: The timeframe here is accurate, but the authority is wrong. The NCLT handles the standard merger route under Sections 230-232; fast track mergers under Section 233 are specifically routed away from the NCLT to the Regional Director to reduce the tribunal's workload.
4. 45-90 Days, NCLAT: Both parts are incorrect. The NCLAT is an appellate body that hears appeals against NCLT orders; it plays no role in approving fast track mergers, and the timeline given does not match the section either.

The combination that correctly reflects both the authority and the timeline under Section 233 is the Regional Director acting within 60 to 90 days.

Hence, the correct answer is 60-90 Days, Regional Director.