Corporate Legal Developments Newsletter | May 2026

This May newsletter covers categories of relevant updates notified by the Ministry of Corporate Affairs (“MCA”) and the Reserve Bank of India (“RBI”) for the month of April.

MCA

The Ministry of Corporate Affairs (“MCA”) has published draft Companies (Incorporation) Amendment Rules, 2026 (“Draft”), proposing amendments to the Companies (Incorporation) Rules, 2014 (“2014 Rules”)

April 8, 2026: Vide public notice (Policy-01/2/2025-CL-V-MCA-Part(2)), the MCA has, with the aim of facilitating the object of Ease of Doing Business, published the Draft, proposing amendments to the 2014 Rules.

Key changes proposed by the Draft include:

• Consolidation of incorporation related forms into two simplified e-forms, namely ‘E-CHNG’ and ‘E-CON’, to reduce multiplicity of filings;
• Simplification of name availability and name reservation provisions. More clarity shall be provided on trademark related objects and related aspects raised by stakeholders;
• Provision to allow for withdrawal of reserved names before incorporation or change of name of a company;
• Omission of Rule 17 (Particulars of first directors of the company and their consent to act as such) of the 2014 Rules, which provides for filing for Form DIR-12 for first directors with their particulars and consents for incorporation, as the details are captured through SPICe+;
• Registered office related documents to be filed shall be updated to encompass a wider range of acceptable documents;
• Physical verification of the registered office under section 12(9) (which enables the Registrar of Companies to carry out a physical verification of a registered office of a company in case he has reasonable cause to believe that the company is not carrying on any business or operations) of the Companies Act, 2013 shall be made more flexible;
• Rules concerning shifting registered offices from one State to another shall be revised. Now, the individual notice with acknowledgment due, shall be served on debenture-holders, creditors, Registrar of Companies, the Securities and Exchange Board of India and concerned regulators by speed post or e-mail (in addition to registered post). Additionally, the proposed Rule 30(9) will allow such shifting in limited cases despite ongoing inquiry/inspection/investigation, except in cases where: (i) there is a change in management of the company under the Insolvency Bankruptcy Code, 2016 and no stay is pending against such proceedings; (ii) the inquiry/inspection/investigation/prosecution relates to any violations/defaults that happened prior to the change in management; (iii) the board of directors has undertaken to co-operate in the proceedings; and (iv) there is no pending prosecution against the company for any violations or defaults that took place subsequent to the change in management;
• Provisions on incorporation through SPICe+ and allotment of Director Identification Numbers (“DIN”) are proposed to be liberalised. The cap on DIN applications at incorporation shall be increased from three to five. Consent from subscribers to the memorandum of association will be deemed consent to act as directors. The other proposed directors will give consent through OTP-based authentication or via Form DIR-2;
• The integrated registration under Rule 38A (Application for registration of Goods and Service Tax Identification Number (“GSTIN”), Employee State Insurance Corporation (“ESIC”) registration, Employees’ Provident Fund Organization (“EPFO”) Registration and Profession Tax Registration (“Profession Tax”), Opening of Bank Account and Shops and Establishment Registration (“S&E”)) (AGILE-PRO-S/INC-35) will continue to facilitate multiple registrations (being GSTIN, EPFO, ESIC, Profession Tax, S&E, and bank account opening). Obtaining EPFO, ESIC and bank account through this route will be made optional, allowing companies to defer these registrations as needed.

Link here

The Ministry of Corporate Affairs (“MCA”) has released a Concept Note: Stakeholder Consultations on Rationalisation of MCA Filing Architecture under the Companies Act, 2013: Re-Envisioning Ease of Doing Business for Viksit Bharat @ 2047 (“Consultation”)

April 16, 2026: The objective of the Consultation is to gather stakeholder feedback on rationalizing the MCA filing framework under the Companies Act, 2013 (“Act”), including consolidation of forms, transition to a data-centric system, expansion of Straight Through Processing (STP), and introduction of an interactive, pre-filled filing interface (MCA21 Version 3).

The consultation shall cover all three stages of a company, i.e., Entry and Incorporation; Operational and Ongoing Compliance; and Exit and Closure. There will be a chapter-wise review of forms and e-forms under the Act, including filings across the entire corporate lifecycle. The stakeholder categories have been mentioned in the Consultation as well.

Link here

The Ministry of Corporate Affairs (“MCA”) has released frequently asked questions (“FAQs”) on the Companies Compliance Facilitation Scheme, 2026 (“CCFS-2026” or “Scheme”)

April 22, 2026: The MCA has released FAQs on the CCFS-2026, which comes into force on April 15, 2026 and will remain in force till July 15, 2026. All companies are eligible except those that are specifically excluded from the applicability of the Scheme.

The Scheme covers e-form relating to annual filings and related compliances including:

• MGT-7 (Annual Return), MGT-7A (Abridged Annual Return for OPCs and Small Companies);
• AOC-4 (Form for filing Financial Statement and other documents with Registrar) including AOC-4 CFS (Form for filing consolidated Financial Statements and other documents with the Registrar), AOC-4 NBFC (Ind AS) (Form for filing Financial Statement and other documents with Registrar), AOC-4 CFS NBFC (Ind AS) (Form for filing consolidated Financial Statements and other documents with the Registrar), and AOC-4 XBRL (Form for filing XBRL document in respect of Financial Statement and other documents with the Registrar);
• ADT-1 (Notice to the Registrar by company for Appointment of Auditor);
• FC-3 (Annual accounts along with the list of all Principal Places of Business in India established by Foreign Company) and FC-4 (Annual Return of a Foreign Company); and
• Legacy forms as mentioned in the FAQs.

The Scheme covers pending annual filings as well. The FAQs also provide information on topics such as benefits for delayed filings for annual returns and financial statements, concessions on normal filing fee, if any, whether the Scheme provides immunity from penalty and using the Scheme to regularize multiple pending filings.

Link here

RBI

The Reserve Bank of India (“RBI”) has updated the Master Directions on Reporting under Foreign Exchange Management Act, 1999

April 1, 2026: Vide RBI/2026-27/02, A.P. (DIR Series) Circular No. 01 dated April 01, 2026, the RBI has updated the master directions on reporting requirements under the Foreign Exchange Management Act, 1999 (“FEMA”) for returns pertaining to the Foreign Exchange Management (Guarantees) Regulations, 2026 (“Guarantee Regulations”). The circular is to be read with Regulation 7 of Guarantee Regulations and the Master Direction – Reporting under Foreign Exchange Management Act, 1999.

Pursuant to the circular, any person required to report a guarantee under Regulation 7 of the Guarantee Regulations may use the reporting files made available on the RBI website under the list of returns submitted to RBI. These include: (i) “Form GRN Issue” for reporting issuance of a guarantee; (ii) “Form GRN Modification” for reporting any subsequent amendment in guarantee terms, including change in guarantee amount, extension of validity period or pre-closure; and (iii) “Form GRN Invocation” for reporting invocation of a guarantee. For each guarantee issuance reported through Form GRN Issue, the authorised dealer bank is required to generate and provide a unique Guarantee Transaction Number prior to submission of the relevant return to the RBI, in the manner specified in the operational guidelines.

The circular further provides that the authorised dealer bank must submit the relevant returns to the RBI within 30 (thirty) calendar days from the end of the relevant quarter through the Centralised Information Management System (“CIMS”) portal. For the purpose of calculating late submission fees, the amount involved in delayed reporting of Form GRN Invocation will be the amount of liability created towards the surety upon invocation, whereas for delayed reporting of Form GRN Issue and Form GRN Modification, the amount involved will be treated as nil, since those returns do not capture fund flows.

Link here.

The Reserve Bank of India (“RBI”) has issued a circular for Overseas Investment – Submission of References to the Reserve Bank

April 1, 2026: Vide RBI/2026-27/03, A.P. (DIR Series) Circular No. 02 dated April 01, 2026, the RBI has issued directions to all Authorised Dealer Category-I banks in relation to the submission of overseas investment related references to the RBI. The circular provides that references pertaining to overseas investment received from persons resident in India through authorised dealer banks, which were previously being processed centrally by the Foreign Exchange Department, Central Office of the RBI, will now be processed by designated regional offices of the RBI with effect from April 01, 2026.

Pursuant to the circular, authorised dealer banks are now required to submit such references through the PRAVAAH portal of the RBI to the relevant designated regional office based on the UIN (Unique Identification Number) prefix of the foreign entity. The UIN mapping prescribed by the RBI is as follows: UIN prefix “AH” to Ahmedabad; “BG” to Bengaluru; “BL”, “BY” or “PJ” to Mumbai; “BN”, “CA”, “GA” or “GH” to Kolkata; “CG”, “JM”, “JR”, “KA”, “ND” or “PT” to New Delhi; “HY” to Hyderabad; and “KO” or “MA” to Chennai.

The circular further notes that necessary amendments are being carried out in the Master Direction – Overseas Investment dated July 24, 2024 to reflect this revised processing framework.

Link here.

The Reserve Bank of India (“RBI”) has updated the Directions on Compounding of Contraventions under FEMA, 1999

April 24, 2026: Vide circular number: A.P. (DIR Series) Circular. No 04/2025-26, the RBI has updated the Directions for Compounding of Contraventions under the Foreign Exchange Management Act, 1999 by inserting a new paragraph 5.4.II.vi in the master directions.

Pursuant to this amendment, the RBI has introduced a limited relaxation in the compounding framework for certain specified contraventions. The newly inserted paragraph provides that, subject to the satisfaction of the compounding authority, and having regard to the nature of the contravention, the exceptional circumstances or facts involved in the case, and wider public interest, the maximum compounding amount imposed may be capped at INR 2,00,000 (Indian Rupees Two Lakh only) for each contravention of a regulation or rule included in a compounding application, where such contravention falls under row 5 of the applicable computation matrix. This cap is therefore discretionary in nature and is not intended to operate automatically in all cases.

The amendment reflects a calibrated approach by the RBI in dealing with eligible FEMA contraventions by allowing the compounding authority to limit the monetary amount in deserving cases involving exceptional circumstances.

Link here.