MCA Relaxes KYC Norms for Directors, Replaces Annual Filing with 3-Year Cycle
The Ministry of Corporate Affairs has replaced annual KYC filing requirements for company directors with a simplified three-year cycle under amended Companies Act rules. The changes, effective March 31, 2026, introduce a revised KYC form for multiple purposes and reduce verification requirements. Directors with current compliance will next file by June 30, 2028, while non-compliant directors have until March 31, 2026, for DIN reactivation.
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The Ministry of Corporate Affairs has introduced significant compliance relief for company directors by replacing the annual KYC filing requirement with a simplified once-in-three-years cycle under the Companies Act, 2013. This major regulatory change aims to reduce the administrative burden on directors while maintaining necessary oversight mechanisms.
Regulatory Framework Changes
The amendment follows a comprehensive review of Rule 12A of the Companies (Appointment & Qualification of Directors) Rules, 2014. The changes were developed based on recommendations from the High Level Committee on Non-Financial Regulatory Reforms and extensive stakeholder feedback received by the ministry.
| Implementation Details: | Timeline |
|---|---|
| Notification Date: | December 31, 2025 |
| Effective Date: | March 31, 2026 |
| Next KYC Due (Compliant Directors): | June 30, 2028 |
| DIN Reactivation Deadline: | March 31, 2026 |
Key Features of New KYC System
Under the revised framework, directors will submit a simplified KYC intimation once every three years instead of the previous annual requirement. The ministry has introduced a comprehensive revised KYC form that serves multiple functions beyond basic compliance verification.
The new form enables directors to:
- Complete mandatory KYC compliance requirements
- Update mobile numbers and email addresses
- Modify residential address information
- Reactivate Document Identification Number (DIN)
Verification Requirements
The amended rules establish specific verification protocols depending on the purpose of form submission. Digital signature verification by the DIN holder or director and professional certification will be mandatory only when the KYC form is submitted for updating mobile numbers, email addresses, or residential addresses. This targeted approach reduces unnecessary verification steps for routine compliance filings.
Transition and Coverage
All directors who have completed their KYC requirements to date are automatically covered under the new provisions. Their next KYC filing will be due by June 30, 2028, providing a clear timeline for compliance planning.
Directors who have not yet submitted their KYC forms retain the opportunity to reactivate their DINs under existing provisions until March 31, 2026. This transition period ensures that non-compliant directors can regularize their status before the new framework becomes fully operational.
Compliance Impact
The ministry emphasized that this amendment provides significant ease of compliance to directors across all companies. By reducing the frequency of mandatory filings from annual to triennial, the changes are expected to substantially decrease administrative costs and time commitments for directors while maintaining regulatory oversight standards.
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