MCA Notification

Company Law Regulations/Provisions applicable from 1st April 2021

Company Law Regulations

A host of new Company law regulations and provisions shall be applicable from the beginning of April this year. The ministry of corporate affairs has amended different rules under the Company Law pertaining to audits, auditors, accounts, etc. The changes have been notified by the ministry and will be applicable from 1st April 2021. In this article, we shall look at new regulations and provisions.

Corporate Social Responsibility

  • Every entity that undertakes Corporate Social Responsibility shall possess the unique CSR registration number.
  • Every company has to publish its CSR policy and composition of CSR committee and project approved by board in its website.
  •  CSR committee shall formulate and recommend the board an annual action plan.
  •  The board’s report of a company covered under the CSR rules related to any financial year should include an annual report on CSR.
  • The Chief Financial Officer will certify that CSR funds disbursed is used for the purposes and in the manner as approved from the board.

Round off figures in financial statements

Now companies should round off figures reflecting in the financial statements, previously it was optional. Further, the criteria of round-off will be based upon total income instead of the turnover. 

Disclosure of shareholding of promoters

The note on share capital in financial statements should now mention the details of shareholding of promoters along with changes, if any, during the financial year under review from 1st April 2021.

Books of accounts in electronic mode with an audit trail feature

Companies that use accounting software to maintain its books of account would use only such accounting software that has the feature of recording audit trail of every transaction, creating an edit log of change made in books of account with the date when the changes were made and ensuring that the audit trail can’t be disabled.

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It may be noted that this requirement has been postponed to next year, i.e., 1st April 2022.

Company Law Regulations: Board report

In addition to existing requirements, the board shall disclose:

  • Details of application made or any proceeding pending under the IBC, 2016 during the year, along with their status as the end of the FY.
  • Details of difference between the valuation amount done at the time of one settlement and the valuation done when taking loan from banks or financial institutions with reasons thereof. 

Reclassification of security deposits

Security deposits maintained with the company will be reclassified as other non-current assets rather than long term loans and advances.

Disclosure requirements under new company law regulations

Disclosure on Utilization of borrowings

The company will disclose the reason for utilization of funds for the purposes other than for which they were borrowed. It will also disclose the purpose for which funds were used. 

Disclosure of all immoveable property details

The company should provide the details regarding all immoveable property (apart from those properties where the company is lessee and the lease agreements are executed in favour of the lessee) whose title deeds is not held in Company’s name in the prescribed format. In case the immoveable property is jointly held with others, details should be provided to the extent of the share of the Company.

Disclosures regarding Loans or advances and regarding Capital work in progress

Disclosure about loans or advances in the nature of loans to promoters, directors, KMPs and related parties either severally or jointly with any person that are repayable on demand or without specifying any terms or repayment period.

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Disclosure should be done about capital work in progress ageing schedule and capital work in progress whose completion is due or has exceeded its cost compared to the original plan.

Disclosure of books of accounts with quarterly or monthly returns

If the company has borrowings from banks or any financial institutions on the basis of security of current assets, it has to disclose whether quarterly returns or statements of the current assets filed by the Company with banks or financial institutions are in agreement with books of accounts. In case it’s not, a summary of reconciliation and reasons of any material discrepancies should be disclosed adequately.

Disclosure about the proceedings initiated or pending against the company

Disclosure should be made about the proceedings initiated or pending against the company for holding of any Benami property under Benami Transactions (Prohibition) Act, 1988[1] and the rules made thereunder.

Further disclosure should be made about the name of the company being declared as a wilful defaulter by a bank or any financial institution or other lenders. 


The new company law regulations and provisions require more disclosures with effect from 1st April 2021. The Ministry of Corporate Affairs has introduced these changes with a view to bring enhanced transparency into the functioning of companies. Some of the mandate such as Companies Audit trail software mandate has been postponed to next year.

Read our article:All you need to know about Filing Form CSR-1 with MCA

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