In a significant move aimed at strengthening the Ease of Doing Business 2.0 framework, the Ministry of Corporate Affairs (MCA) has announced a series of compliance-friendly reforms, including a major enhancement in the thresholds for classification of “small companies” under the Companies Act, 2013. The revised norms will come into effect from December 1, 2025, substantially reducing regulatory obligations for a larger number of corporates.
Under the new framework, the paid-up capital limit for small companies has been increased from ₹4 crore to ₹10 crore, while the turnover threshold has been raised from ₹40 crore to ₹100 crore. This expansion will bring many more companies within the small company category, allowing them to benefit from reduced compliance requirements as compared to larger entities.
Long-Term Decriminalisation Drive
The government has also highlighted its sustained efforts to decriminalise minor and procedural offences under corporate laws. Amendments to the Companies Act in 2018 and 2020 resulted in the decriminalisation of 51 offences, converting them into civil defaults with monetary penalties. Similarly, the LLP (Amendment) Act, 2021 decriminalised 12 offencesunder the LLP framework. These steps have eased pressure on criminal courts and the National Company Law Tribunal (NCLT) while promoting a trust-based regulatory environment.
Further strengthening this approach, the Jan Vishwas (Amendment of Provisions) Act, 2023 decriminalised 183 provisions across 42 Central Acts, reinforcing the government’s commitment to Ease of Living and Ease of Doing Business. Additionally, Central Ministries, Departments, and States/UTs have collectively reduced over 47,000 compliances through simplification, digitisation, decriminalisation, and elimination of redundant requirements.
Faster Corporate Restructuring and Exit
To support quicker business restructuring, the scope of fast-track mergers was expanded in February 2021 to include mergers between start-ups and small companies. This was further widened in September 2025, allowing more classes of companies to opt for this route. The introduction of “deemed approval” for fast-track mergers ensures time-bound regulatory clearances.
For businesses seeking closure, the establishment of the Centre for Processing Accelerated Corporate Exit (C-PACE)in May 2023 has enabled a streamlined, time-bound process for striking off companies and LLPs from the register.
Digitisation Through MCA21 V3
A major pillar of compliance reform has been the rollout of MCA21 Version 3 (V3), designed to enhance transparency, improve compliance monitoring, and simplify corporate filings. The platform now supports web-based filings, LLP and company modules, and an e-learning management system. Real-time validation, pre-filled master data, and automated checks have significantly reduced errors, re-submissions, and processing timelines.
The Central Processing Centre (CPC), set up in February 2024, further supports centralised processing of non-straight-through forms, improving efficiency and consistency.
Stakeholder Support and Grievance Redressal
To help corporates adapt to evolving compliance requirements, the MCA conducts regular webinars and training programmes. The portal also hosts video tutorials, FAQs, user manuals, and a chatbot. A dashboard facility allows stakeholders to track filings, payments, and approvals in real time.
A dedicated helpdesk has been established for grievance redressal, with professional institutes now partnering with MCA to review ticket closures and gather post-resolution feedback, strengthening accountability and user experience.
Governance Norms for Listed Companies
For listed entities, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) continue to emphasise ethical governance and board accountability. These include principles on shareholder rights and disclosures, mandatory codes of conduct for boards and senior management, and annual performance evaluations of directors, including independent directors, overseen by the Nomination and Remuneration Committee.
CSR Transparency and Data Analytics
Corporate Social Responsibility (CSR) remains a board-driven process, with eligible companies required to file Form CSR-2. All CSR-related disclosures filed on the MCA21 registry are publicly accessible via www.csr.gov.in, enhancing transparency.
MCA21 V3 is also equipped with advanced data analytics-driven enforcement tools, including the Early Warning System (EWS) and Compliance Management System (CMS). These systems use risk-based profiling, automated alerts, and pattern analysis to proactively identify non-compliance.
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