India’s corporate regulatory landscape has undergone a significant transformation in 2025 with the Ministry of Corporate Affairs (MCA) introducing a series of updates aimed at enhancing transparency, simplifying compliance, and accelerating digitalisation. These MCA Updates 2025, particularly to the MCA Incorporation Rules and submission of Balance sheet and annual return directly impact company registration and annual compliance of the companies in India.

Who Can Incorporate & What’s New in SPICe+

Who Can Incorporate a Business in India?

As per the Ministry of Corporate Affairs (MCA) guidelines under the Companies Act, 2013 and LLP Act, 2008, the following categories of people and entities are eligible to incorporate a business (such as a company or LLP) in India:

1. Individuals

• Indian nationals aged 18 years or above with a valid Digital Signature Certificate (DSC).
• Foreign nationals and NonResident Indians (NRIs) can also incorporate companies in India, subject to compliance with Foreign Direct Investment (FDI) regulations and sector caps.
• Directors and shareholders can be Indian or foreign individuals, but at least one director must be a resident of India (i.e., stayed in India for at least 182 days in the preceding financial year).
• Minimum directors/shareholders:
  • Private Limited Company – 2 directors & 2 shareholders
  • Public Limited Company – 3 directors & 7 shareholders
  • One Person Company (OPC) – 1 director & 1 nominee
  • LLP – 2 partners (at least one must be a resident of India).

2. Corporate Entities

• Other companies or corporate bodies (Indian or foreign) can participate as shareholders in a new company.

3. Other Entities

• LLPs, partnerships, and trust entities may be incorporated as shareholders or directors (where permitted) or converted into companies under MCA rules.

4. Special Categories & SectorSpecific Requirements

• Nidhi companies and other specialised entities require minimum members and additional compliance as per their respective rules.
• Pharma, financial services, and other regulated sectors may need prior approvals from regulators like RBI, SEBI, or the State Licensing Authority.

Company Name Guidelines & Regulated Keywords

Under Rule 8 of the Companies (Incorporation) Rules, 2014, a company’s name must be unique, nondeceptive, and not infringe existing trademarks. Names are reserved via RUN or SPICe+ Part A and remain valid for 20 days.

In July 2024, the Companies (Incorporation) Amendment Rules, 2024 eased naming restrictions for Nidhi companies. Earlier, using the word “Nidhi” in a company’s name required prior Central Government approval. Now, this approval is no longer mandatory at the time of incorporation. However, companies using “Nidhi” must still comply with Nidhi Rules, 2014—including filing Form NDH1 and meeting membership and capital requirements—to be formally recognised as a Nidhi company.

A Nidhi company works like a member‑driven mutual benefit society, pooling deposits from members and lending back to them at reasonable interest rates.

Despite that change, names containing restricted terms such as “Finance,” “Venture,” “Asset Management,” “Mutual Fund,” or “Bank” remain subject to special scrutiny under Rule 8A(1)(p). Applicants must submit a declaration confirming that the proposed entity will comply with the regulations of the relevant sectoral regulator (e.g., RBI, SEBI, IRDAI) before name approval is granted

Registered Office Verification: INC22A Overhaul

One of the most significant changes under G.S.R. 426(E) (dated June 27, 2025) is the Companies (Incorporation) Amendment Rules, 2025, effective July 14, 2025.

Key updates to Form INC22A ACTIVE (Active Company Tagging Identities & Verification):

• Geotagged photographs (internal & external) of the registered office, showing the nameboard and at least one director or Key Managerial Personnel (KMP).
• Signboard compliance as per Section 12 of the Companies Act, 2013: must display company name & address in English and local language, along with CIN, registered address, contact details, and GST number (if applicable).
• Latitude & longitude coordinates of the office location, embedded in photo metadata for physical verification.
  Digitally verified email IDs using OTP authentication.
• Director compliance checks: All directors’ DINs must be active (not deactivated for nonKYC or disqualification).
• Mandatory attachments for companies exceeding statutory director limits (e.g., MGT14 resolutions).
• Professional certification: Every INC22A must be certified by a practising CA, CS, or CMA.

Noncompliance risks: Filings may be rejected or marked defective, companies may be flagged as “inactive,” restricting future filings, and penalties under the Companies Act may apply.

V3 Portal Migration: A Regulatory Reset

The MCA V3 portal—rolled out on July 14, 2025—marks a significant regulatory reset. A total of 38 e forms have migrated from Version 2 to Version 3, including SPICe+, AOC 4, MGT 7, ADT 1 to ADT 4, CRA 2, GNL 1, and more.

What is new in V3?

• XML‑based, machine‑readable e‑forms with structured metadata.
• Granular disclosures: gender‑wise shareholding, FII ownership, debt & debenture details.
• Geo‑tagging for statutory filings, now extended to annual forms like AOC‑4, MGT‑7, and MGT‑7A.
• AI‑driven real‑time validation and auto‑rejection for incomplete or incorrect filings.

Integrated AOC 4 Filings:

The redesigned AOC 4 form now integrates the contents of AOC 1, AOC 2, and extracts from the Board’s and Auditor’s Reports directly into the web form, rather than as separate attachments. While signed financial statements (PDF/XBRL) must still be uploaded, the core disclosures are now structured and machine readable, enhancing oversight and reducing filing errors.

This shift requires greater preparation and coordination between management and auditors to ensure alignment between figures, narratives, and annexures.

Revamped MGT 7 Annual Returns:

MGT 7 has been extensively redesigned, requiring Excel based uploads for shareholder and debenture data, including gender wise and category wise shareholding as well as PAN/Aadhaar details of shareholders or designated persons to establish beneficial ownership. It also mandates geo tagged registered office photos, embedded MGT 8 certifications, and captures meeting records, share transfers, and designated compliance contacts.

These changes make the annual return more exhaustive and significantly raise the filing accuracy bar, demanding early coordination between companies and their secretarial teams.

These upgrades improve regulatory oversight and corporate transparency but also increase the complexity of filings—underscoring the need for expert support from professionals like BCL India to ensure accuracy and compliance.

Implications for Stakeholders

For New Companies:

• Webbased incorporation forms mean even small errors can cascade across linked filings.
• The process is more streamlined but comes with stricter document verification and realtime scrutiny, leaving little room for postfiling corrections.

For Existing Companies & CS/CA Professionals:

• Annual INC22A ACTIVE filings now require geotagged photos and director presence proof.
• Higher governance standards with stricter penalties for noncompliance.
• Revised steps for MGT7 and AOC4, requiring early preparation of shareholder data, PAN/Aadhaar details, and alignment of board/auditor reports to avoid discrepancies.

For Regulators & Investors:

• Enhanced transparency through integrated, structured eforms and granular disclosures.
• Automated checks and geotagging make it harder for shell entities to bypass compliance, reinforcing investor confidence and aligning with India’s corporate governance goals.

For Professionals:

The complexity of V3 filings and form‑specific disclosures increases the demand for expert CA/CS support, making professional oversight critical for error‑free submissions and timely compliance.

Conclusion

The MCA Incorporation Rules and Company Registration Changes India (2025) mark a decisive move toward a transparent, digital‑first corporate regime. While they raise the compliance bar for companies, they also create a more trustworthy business environment aligned with India’s Digital India vision.

For entrepreneurs, directors, and professionals, staying ahead of these updates—ideally with expert guidance—will be key to maintaining seamless, penalty‑free operations in the new regulatory landscape.