In recent months, the Ministry of Corporate Affairs (MCA) has introduced several revisions in statutory e-forms pursuant to the transition from the V2 to the V3 portal and the digitalisation of previously manual forms. These amendments are part of MCA’s continuing efforts to enhance transparency, improve compliance oversight, and align regulatory filings with the substantive requirements under the Companies Act, 2013 and allied rules.

Some of the key forms revised include AOC-1, AOC-2, AOC-4, CRL-1, CSR-1, LEAP-1, INC-22A, among others. Below is a critical analysis of the major changes and their legal implications:

I – Form AOC-1 – Statement of Subsidiaries/Associates/JVs

Key Changes:

1. AOC-1 is now a standalone e-form, mandatorily filed separately along with AOC-4.
2. Signing provisions are now relaxed—any one of the following can sign: Director, CEO, CFO, Manager, or Company Secretary.
3. Earlier, the form required to be signed by only those directors/KMPs who had signed the balance sheet.

Implications:

The ease in signing provisions may reduce procedural hurdles but also places greater reliance on internal controls for ensuring correctness of subsidiary data, as accountability is now dispersed.

II – Form AOC-2 – Disclosure of Related Party Transactions (RPTs)

Key Changes:

1. A new field introduced for mentioning the SRN of MGT-14, where shareholder approval is obtained for non-arm’s length transactions.
2. Now also an e-form, to be digitally signed like AOC-1.

Legal Concerns:

This field may create ambiguity. Not all transactions at non-arm’s length require shareholder approval—only material RPTs under Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014. Hence, a mandatory SRN requirement may misrepresent compliance or confuse filers where shareholder approval is not mandated.

Suggestion: MCA should provide clarification or validation logic in the e-form to differentiate between material and immaterial non-arm’s length transactions.

III – Form CSR-1 – Registration of NGOs as CSR Implementing Agencies

Key Changes:

1. Broader eligibility by including entities registered under clauses (iv), (v), (vi), or (via) of Section 10(23C) of the Income Tax Act, 1961.
2. Earlier, only entities registered under Section 12A were permitted.

Impact:

This brings greater alignment with Rule 4 of the Companies (CSR Policy) Rules, 2014, as amended in January 2021, expanding the eligible pool of non-profits including educational institutions, medical colleges, and hospitals.

However, it also requires greater due diligence by corporates before engaging with NGOs—verification of eligibility, compliance with CSR registration, and ongoing disclosures under CSR-2.

IV – Form CRL-1 – Return on Number of Layers of Subsidiaries

Key Changes:

1. Modified declaration now includes that “all requirements of the Companies Act and Rules related to this subject matter have been complied with.”
2. Earlier, it was limited to “true and factual information”.

Legal Anomaly:

The above form has been revised with a few other changes, more importantly, changes in the declaration part of the form. At the onset, the requirement of filing this form is one time when the Companies (Restriction on number of layers) Rules, 2017 came into being w.e.f 20th September 2017, and that too it applied only to existing companies present at that time which had more than two layers of subsidiaries. In the declaration part of the earlier version of the said form, it was mentioned that the information provided in this form was factual, true and complete, and nothing was being concealed or suppressed. This erstwhile declaration was limited to the furnishing of information and facts related to the number of layer of subsidiaries. Now, under the revised e-Form CRL-1, the declaration covers not only covers furnishing true information but also covers “all the requirements of the Companies Act, 2013 and the rules made thereunder in respect of the subject matter of this form and matters incidental thereto have been complied with”. Here, it is pertinent to note that this e-form is particularly applicable only when an existing company is in breach of the limits of having more than the required number of layers of subsidiaries, while the declaration says all the requirements of the Act related to layers of subsidiaries have been complied with which is contradictory with the object of filing this form.   

Recommendation: MCA should either rephrase the declaration or insert a proviso that clarifies the nature of compliance in context—i.e., furnishing information for regularization or historical disclosures.