Being reactive to worldwide trends and including technical advancements, the Companies Act, 2013, has been modified several times since its introduction to fit the developing corporate environment in India. Setting the tone, changes are presented to simplify compliance, raise corporate governance standards, increase openness, and enable businesses to operate more easily. Over time, modifications have concentrated on important areas like disclosures, auditing procedures, corporate social responsibility (CSR), board independence, mode of filing, and penalties on default. While the earlier amendments concentrated on decriminalising certain crimes and the introduction of technological filing systems, later ones emphasised guaranteeing accountability via audit. trails, strict corporate social responsibility rules, and more reporting demands.
Latest 2025 Amendments in Company Law
In mid-2025, the Ministry of Corporate Affairs (MCA) introduced a set of Companies Act 2013 amendments that came into effect largely on July 14, 2025. The regulatory package highlights:
(1) digitisation and moving many e-forms to the new portal,
(2) greater and deeper disclosures in board reports and statutory filings (including compliance information on gender, POSH, and maternity),
(3) updated or replaced e-forms (e.g., AOC-series, INC-22A, CSR-1, GNL-1, etc.), and
(4) operational controls such as mandatory audit-trail requirements for accounting software and better certification and attachment rules.
Most of the changes for 2025 were made by the MCA during late May to June 2025 and became operative on July 14, 2025 (some incorporation changes were notified on June 27, 2025, having the same effective date). The regulations are published in terms of the applicable provisions of the Companies Act (notifications contain G.S.R. numbers and text released in the Official Gazette).
1. Companies (Accounts) — Second Amendment Rules, 2025
Several papers and e-forms (AOC-1, AOC-2, AOC-4 and variants thereof, CSR-2) are being substituted with new e-forms and revised filing formats. The new forms have more formalised fields and require attachments (signed financial statements and consolidated financial statements where necessary).
New or increased disclosures in the Board’s Report and e-forms –
Board’s Report/extract and AOC forms now require more information disclosures, like:
- Number of complaints of sexual harassment received and settled
- Statements confirming compliance with the Maternity Benefit Act, 1961
- More information on workforce and gender reporting and on independent directors (including skill and observations on appointments), internal financial controls, CARO observations in consolidated statements, foreign exchange earnings and expenses, etc.
These facts are now captured as organised fields in the new e-forms, increasing transparency and making it easier to detect omissions while e-filing.
Auditor/audit-related changes
Enhanced auditor reporting fields and report template in filing forms, with specific fields for opinion, significant audit issues, reporting of internal financial controls, and observations under CARO. This makes most auditor disclosures in ROC filings formal.
The new disclosures (POSH/maternity/internal financial controls) have to be included by companies in their statutory board reports and financial statements. Attachments also have to be in the applicable electronic formats when filing electronically.
Accounting systems: audit trail requirements and digitalisation expectations
- Organisations are to use accounting software with a non-disableable audit trail, such as transaction edit logs and tamper evidence, as per the 2025 guidelines and guidance.
- The intention is to enhance the integrity of books and detect or prevent manipulation. Compliance comments from practitioners highlight the need for implementation and certification.
Practical steps involve:
- looking at accounting systems,
- having audit-trail logs enabled,
- keeping backups, and
- being ready to provide logs during audits or ROC requests.
Small businesses that outsource accounting need to obtain written assurance from service providers that audit-trail features are enabled and tamper-proof.
2. Companies (Incorporation)— replaced INC-22A (ACTIVE form)
MCA’s “active company” authentication process and portal redesign led to the replacement of Form INC-22A with ACTIVE (Active Company Tagging Identities and Verification). The replacement is intended to simplify incorporation-related verification and switch to a contemporary e-form architecture.
Newly incorporated companies and companies requested to update their “active” status are required to submit the new e-form in the MCA portal version prescribed. Companies are advised to go through the fields in INC-22A (now ACTIVE) and prepare the necessary digital attachments in advance.
3. Companies (Registration Offices & Fees): introduction of the new GNL-1 and procedural updates.
The GNL-1 form (application made to the Registrar of Companies for compounding, AGM extension, scheme approvals, etc.) has been changed to a new structured format with more elaborate fields, including purpose selection, applicant category, detailed attachments (board resolutions, scheme documents), and SFIO/investigation disclosures fields. The Rules have also been modified to include changed fee/payment mechanisms. The effective date is also aligned with other regulations made effective for July 2025.
Practical effect: Filers (firms, authorised persons, professionals) must fill out the new formatted GNL-1 and submit supporting records. In requesting compounding or extension of AGM, it is necessary to insert details from the added fields (reason for default, length of default, and whether the default has been made good). The new format avoids back-and-forth communications but requires more careful preparation before filing.
4. Companies (Corporate Social Responsibility Policy)—CSR-1 (Registration of Implementing Entities)
- The MCA has substituted the CSR-1 e-form (Registration of Entities for CSR Activities) with a more detailed form and more stringent documentation/verification requirements.
- Eligible entities are defined (Section 8 firms, registered trusts/societies with 80G/12A, etc.), and the form requires PAN, registration certificates, details of authorised representatives, digital authentication (OTP), and certification by a practising professional.
- The aim is to increase the professionalism and evaluation of CSR implementation agencies.
The implication is that business companies will be able to access a verified and limited list of registered CSR agencies. Prior to the release of CSR funds, corporations should make NGOs/implementing agencies apply for new CSR-1 registrations (and ask for the SRN). To be eligible for CSR partnerships, NGOs should fill out CSR-1, certify attachments, and submit a professional certification.
Practical Compliance Checklist for Companies
- Use AOC-1/AOC-2/AOC-4/CSR-2/INC-22A/GNL-1 to identify the relevant filings and obtain the new e-form templates.
- Update board reports and disclosures to include information on Posh/sexual harassment complaints, maternity compliance statements, internal financial control statements, and any required CARO/IFC commentary according to the new template.
- When using accounting software, ensure audit-trail functionality is active, keep logs, and obtain formal assurance from the vendor or outsourcing partner. It is a good idea to use software that makes it impossible to disable audit logs.
- Conduct due diligence on CSR partners by soliciting the CSR-1 SRN and supporting documents from NGOs or implementing agencies, or requiring registration if necessary. Revise CSR vendor onboarding checklists to include the CSR-1 status and professional certification.
- Share the revised e-form fields with auditors and the company secretarial team to ensure audits, certifications, and attachments are ready to file.
- Compile attachments like signed financial reports, consolidated financial reports, CARO reports, board resolutions, evidence of compliance with labour legislation (where required), and professional certification.
Consequences of Non-Compliance
Nonadherence to the new changes made under the Companies Act, 2013, effective from July 14, 2025, can result in major regulatory, financial, and reputational risks for companies and their workers.
The changes have increased the burden of annual filing (AOC forms, CSR-2), Board’s Report disclosures, CSR registration, audit trail preservation in accounting software, and the use of alternative e-forms like INC-22A and GNL-1.
Non-compliance with these adjustments can attract monetary penalties as prescribed in the respective provisions of the Act. For example, lateness or discrepancy in filing financial accounts and board reports can attract penalties against the company and defaulting officers ,such as directors and senior executives. Misrepresentation, suppression of material facts, or furnishing false information in the new redesigned e-forms can invite penal provisions under Sections 448 and 449, which can result in fines and imprisonment on grounds of fraud.
Failure to comply with audit-trail specifications within accounting software can lead to disqualification during statutory audits, investigation by regulatory agencies, and increased focus during inspections. Similarly, the failure to ensure CSR expenditures through organisations registered under the amended CSR-1 framework can nullify CSR spending assertions, result in fines under Section 135, and harm the social image of the firm.
Furthermore, failure to file the new INC-22A (ACTIVE) or GNL-1 form can result in the company being labelled as inactive or subject to future filing and compliance limitations. In short, noncompliance carries risks of regulatory actions, erosion of brand value, and monetary penalties, and therefore, the importance of strict adherence to the 2025 amendments cannot be overstated.
Conclusion
The 2025 company law changes represent a major step toward improved governance, openness, and the incorporation of digital technologies in corporate compliance. The Ministry of Corporate Affairs has brought out alternate electronic formats for financial reporting, CSR disclosures, and incorporation procedures, creating a more ordered and technology-based framework. While extra disclosures in the Board’s Report improve accountability in financial reporting, the need for an audit trail in accounting packages improves its integrity.
Noncompliance with these guidelines will have serious consequences, demonstrating the government’s commitment to imposing discipline in corporate culture. In general, these changes show progress in bringing Indian corporate law into line with international best standards as well as in creating trust, efficiency, and responsibility in the business sector.
