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The Ministry of Corporate Affairs ("MCA"), by no fica on dated 31 December 2025, has amended the Companies (Appointment and Qualifica on of Directors) Rules, 2014, to substan ally ease the compliance burden on company directors by replacing the annual Know Your Customer ("KYC") filing requirement with a triennial regime. The amendments also introduce a simplified KYC web-based form and facilitate easier voluntary closure of sick government companies through the Centralised Processing Centre ("C-PACE"). The changes will come into force from 31 March 2026. Please click here to read the No fica on
Background and Legisla ve Framework
Under the exis ng framework, directors were required to annually
file their KYC details in e-Form DIR-3-KYC or DIR-3-KYC-Web
pursuant to Rule 12A of the Companies (Appointment and Qualifica on
of Directors) Rules, 2014. Non-compliance resulted in deac va on of
the Director Iden fica on Number
("DIN"), necessita ng reac va on upon
filing. Following stakeholder feedback and recommenda ons of
regulatory reform commi ees, the MCA has reviewed the annual filing
requirement with the objec ve of reducing repe ve compliance while
retaining regulatory oversight.
Key Amendments to Directors' KYC Requirements
The amended Rule 12A introduces a triennial KYC filing regime. Every individual holding a DIN as on 31 March of a financial year is now required to file KYC details in Form DIR-3-KYC-Web on or before 30 June of the immediately following every third consecu ve financial year. Directors who have already completed their latest KYC filing will therefore be required to file again only by 30 June 2028.
At the same me, the amendment retains a real- me update mechanism. Any change in personal mobile number, email address, or residen al address must be inmated by f iling DIR-3-KYC-Web within thirty days of such change, along with the prescribed fee. Directors who have not completed their pending KYC filings must reac vate their DINs in accordance with exis ng provisions by 31 March 2026.
Revised DIR-3-KYC-Web Form and Cer fica on Requirements
The MCA has no fied a revised DIR-3-KYC-Web form to serve mul ple purposes, including KYC compliance, DIN reac va on, and upda ng contact and address details. The amended framework limits the requirement of digital signature verifica on by the director and cer fica on by a prac sing professional to cases involving upda on of mobile number, email address, or residen al address. Rou ne KYC compliance without changes can therefore be completed with reduced procedural formali es.
Amendments Facilita ng Voluntary Closure of Government Companies
In a separate but related reform, the MCA has amended the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, to ease the voluntary closure of sick government companies and their subsidiaries through the C PACE mechanism. For such closures under sec on 248(2) of the Companies Act, 2013, the indemnity bond required to be submi ed may now be executed by an authorised representa ve not below the rank of Under Secretary in the concerned administra ve ministry or department, instead of individual government-nominated directors.
Statement of Objects and Regulatory Intent
The amendments seek to strike a balance between regulatory oversight and ease of compliance. By replacing annual KYC filings with a triennial requirement while retaining event-based upda on, the MCA aims to reduce repe ve compliance for over three million registered directors without compromising the accuracy of the DIN database. Similarly, procedural simplifica on for the closure of government companies reflects the government's broader objec ve of expedi ng exit mechanisms and reducing administra ve bo lenecks.
MHCO Comment
The MCA's move to introduce triennial KYC filing marks a significant compliance ra onalisa on for company directors and professionals. While the relaxa on reduces rou ne filings, it also places greater responsibility on directors to promptly report changes in personal par culars, failing which DIN deac va on may follow, a risk frequently highlighted in regulatory analyses undertaken by a corporate law firm in India. The streamlined DIR-3-KYC-Web form and limited cer fica on requirements further ease procedural burdens. The parallel reform easing the voluntary closure of government companies underscores a consistent policy shi towards simplifica on and efficiency in corporate regula on. Overall, the amendments reflect a pragma c approach to compliance management while preserving regulatory safeguards.
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