By Shreya Dalal, Associate Partner & Divyang Salvi, Associate
The Ministry of Corporate Affairs (“MCA”), by notification dated 31 December 2025, has amended the Companies (Appointment and Qualification of Directors) Rules, 2014, to substantially 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 Notification
Background and Legislative Framework
Under the existing 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 Qualification of Directors) Rules, 2014. Non-compliance resulted in deactivation of the Director Identification Number (“DIN”), necessitating reactivation upon filing. Following stakeholder feedback and recommendations of regulatory reform committees, the MCA has reviewed the annual filing requirement with the objective of reducing repetitive 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 consecutive 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 time, the amendment retains a real-time update mechanism. Any change in personal mobile number, email address, or residential address must be intimated by filing 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 reactivate their DINs in accordance with existing provisions by 31 March 2026.
Revised DIR-3-KYC-Web Form and Certification Requirements
The MCA has notified a revised DIR-3-KYC-Web form to serve multiple purposes, including KYC compliance, DIN reactivation, and updating contact and address details. The amended framework limits the requirement of digital signature verification by the director and certification by a practising professional to cases involving updating of mobile number, email address, or residential address. Routine KYC compliance without changes can therefore be completed with reduced procedural formalities.
Amendments facilitating 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 section 248(2) of the Companies Act, 2013, the indemnity bond required to be submitted may now be executed by an authorized representative not below the rank of Under Secretary in the concerned administrative 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 updating, the MCA aims to reduce repetitive compliance for over three million registered directors without compromising the accuracy of the DIN database. Similarly, procedural simplification for the closure of government companies reflects the government’s broader objective of expediting exit mechanisms and reducing administrative bottlenecks.
MHCO Comment
The MCA’s move to introduce triennial KYC filing marks a significant compliance rationalisation for company directors and professionals. While the relaxation reduces routine filings, it also places greater responsibility on directors to promptly report changes in personal particulars, failing which DIN deactivation 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 certification requirements further ease procedural burdens. The parallel reform easing the voluntary closure of government companies underscores a consistent policy shift towards simplification and efficiency in corporate regulation. Overall, the amendments reflect a pragmatic approach to compliance management while preserving regulatory safeguards.
The views expressed in this update are personal and should not be construed as any legal advice. Please contact us for any assistance.