MCA Pushes Major Corporate Reforms in 2025 to Ease Compliance and Boost Governance

The Ministry of Corporate Affairs (MCA) undertook a wide range of reforms in 2025 with the objective of making corporate rules simpler, reducing compliance burden, and improving services for companies, directors and investors, an official statement said on Thursday.

These measures focused on ease of doing business while ensuring transparency and strong corporate governance.

One of the most important steps taken during the year was the expansion of the definition of “small companies.” By increasing the limits for paid-up capital and turnover, many more companies now fall under this category.

This change allows such companies to follow simpler compliance requirements, reducing costs and paperwork, and supporting their growth in the formal economy.

The Ministry also streamlined the process for closing down companies, especially government companies that are no longer operational.

Amendments to the rules for removing company names from the official register were introduced to make the procedure faster and less complicated. This helps in clearing inactive entities and improving administrative efficiency.

In a major relief for company directors, the MCA rationalised the Know Your Customer (KYC) requirements. Instead of filing KYC details every year, directors are now required to update their information once every three years. This move significantly reduces repetitive filings while maintaining necessary regulatory checks.

To support companies during the transition to the upgraded MCA digital system, the Ministry issued several general circulars. These provided additional time for statutory filings without late fees and allowed companies to hold meetings such as AGMs and EGMs through virtual mode, ensuring smoother compliance and continuity of operations.

Investor protection remained a key focus area. The Investor Education and Protection Fund Authority strengthened its grievance redressal mechanism by launching an integrated digital portal along with a dedicated call centre.

These steps have helped speed up the process of settling claims related to unclaimed dividends and shares, making the system more transparent and investor-friendly.

Progress under the Insolvency and Bankruptcy Code also continued during the year.

A large number of resolution plans were approved, leading to substantial recovery for creditors. Ongoing reforms are aimed at further reducing resolution timelines and improving the overall efficiency of the insolvency framework.

The Ministry also expanded the scope of fast-track mergers and demergers, enabling certain categories of companies to restructure more easily and at lower cost. This is expected to support business consolidation and operational efficiency.

To strengthen regulatory oversight and improve service delivery, the MCA expanded its institutional presence by setting up additional Regional Directorates and Registrar of Companies offices. This expansion is designed to meet the growing needs of India’s expanding corporate sector.

Overall, the reforms carried out in 2025 reflect the Ministry of Corporate Affairs’ continued effort to create a simpler, more efficient, and investor-friendly corporate ecosystem while maintaining strong governance standards.