AMENDMENTS UNDER 

COMPANIES ACT, 2013 WHICH CAME

INTO EFFECT FROM 01ST APRIL 2021

Amendment 1 CHANGE IN The Companies (Specification of Definitions

DEFINITION OF Details) Amendment Rules, 2021 passed on 1st
SMALL COMPANY February 2021. Definition of Small Company has
been changed by these amendments.
This Rules came into effect from 1st April 2021
‘‘Small Company’’ means a company, other than a
public company,—
 paid-up share capital of which does not
exceed two crores rupees or such higher
amount as may be prescribed which shall not
be more than ten crore rupees and
 turnover of which as per profit and loss
account for the immediately preceding
financial year does not exceed twenty crore
rupees or such higher amount as may be
prescribed which shall not be more than one
hundred crore rupees.
Provided that nothing in this clause shall apply to—
 a holding company or a subsidiary company;
 a company registered under section 8; or
 a company or body corporate governed by
any special Act;
Amendment 2 CONCEPT OF ONE The Companies (Incorporation) Second
PERSON COMPANY Amendment Rules, 2021 passed on 1st February
2021, through these rules MCA has made
amendment in many provisions of One Person
Company.
This Rules came into effect from 1st April 2021
 Earlier, only Indian resident citizens were
allowed to form one person companies in
India. Non-resident individuals with
entrepreneurial potential are now enabled to
set up One Person Companies (OPC) with no
paid up capital and turnover restrictions,
 Further, the Budget made space for easing
norms for setting up of One Person Company
(OPC) by reducing the residency limit of
NRIs from 182 to 120 days.
 Since the amendment in Companies
(Incorporation) Rules, 2014 had done away
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with requirement of paid up capital of

Rupees Fifty Lakhs or less and turnover of
Rupees Two Crore or less for Conversion of
OPC, now any Resident or Non-Resident
who has stayed in India for more than 120
who has incorporated OPC can convert the
OPC into Private Company or Public
Company other than Section 8 Company
with no paid up capital and turnover
restriction.
Amendment 3 MERGER OR Earlier under Section 233 of Companies Act, 2013 a
AMALGAMATION scheme of arrangement may be entered between two
OF STARTUP or more small companies or between a holding
COMPANIES company and its wholly-owned subsidiary company
but pursuant to amendment in Companies
(Compromises, Arrangements and
Amalgamations) Rules, 2016 now the scheme of
fast track merger can be entered into by the
following companies:
 two or more small companies
 holding company and its wholly-owned
subsidiary company
 two or more start-up companies
 one or more start-up company with one or
more small company.

Amendment 4  DEFINITION OF The Companies (Specification of Definitions

LISTED COMPANY Details) Second Amendment, Rules 2021 passed
on 19th February 2021. These Rules came into effect
from 1st April 2021.
Definition of Listed Company has been changed by
this amendment: Following companies shall not be
considered as Listed Company-
a. Public companies which have not listed their
equity shares on a recognized stock exchange but
have listed their –
(i) non-convertible debt securities issued on private
placement  basis  in terms of SEBI (Issue and
Listing of Debt Securities) Regulations, 2008; or
(ii) non-convertible redeemable preference shares
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issued on private placement basis in terms of SEBI

(Issue and Listing of Non-Convertible
Redeemable Preference Shares) Regulations,
2013; or
(iii) both categories of (i) and (ii) above.
b. Private companies which have listed their non-
convertible debt securities on private placement
basis on a recognized stock exchange in terms
of SEBI (Issue and Listing of Debt Securities)
Regulations, 2008;
c. Public companies which have not listed their
equity shares on a recognized stock exchange but
whose equity shares are listed on a stock exchange in
a jurisdiction as specified in sub-section (3) of
section 23 of the Act.”

Amendment 4 APPLICABILITY OF Ministry of Corporate Affairs has notified

NEW CARO the Companies (Auditor’s Report) Order,
2020 (CARO, 2020) which shall be applicable for
the eligible companies for the financial year
commencing on or after 1st April, 2021.
There are in total 21 clauses in CARO 2021 in
comparison to 16 clauses in CARO 2016. As 1 old
clause deleted, 1 clause is merged with other and 7
new clauses are inserted.
Therefore, while preparing the auditor report for the
F.Y. 2021-22, Auditors have to use the new CARO.

Amendment 5 FINANCIAL The Ministry of Corporate Affairs vide Notification

STATEMENT dated 24 March 2021 has amended Schedule III to
(SCHEDULE III) the Companies Act, 2013, which shall be effective
WITH NEW from the 1st day of April 2021 for F.Y. 2021-22.
CLAUSES
Ministry by this amendment has added many new
disclosures in Notes to accounts of Balance Sheet
and P&L like:
a) Disclosure of Shareholding of Promoters
b) Trade Payables ageing schedule with age 1 year,
1-2 year, 2-3 year & More than 3 years
c) Reconciliation of the gross and net carrying
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amounts of each class of assets

d) Trade Receivables ageing schedule with age 1
year, 1-2 year, 2-3 year & More than 3 years
e) Detailed disclosure regarding title deeds of
Immovable Property not held in name of the
f) Disclosure regarding revaluation & CWIP
g) Loans or Advances granted to promoters,
directors, KMPs and the related parties
h) Details of Benami Property held
i) Reconciliation and reasons of material
discrepancies, in quarterly statements submitted to
bank and books of
j) Disclosure where a company is a declared wilful
defaulter by any bank or financial Institution
k) Relationship with Struck off Companies
l) Pending registration of charges or satisfaction with
Registrar of Companies
m) Compliance with number of layers of companies
n) Disclosure of 11 Ratios
o) Compliance with approved Scheme(s) of
Arrangements
p) Utilisation of Borrowed funds and share premium
q) Details of transaction not recorded in the books
that has been surrendered or disclosed as income in
the tax assessments
r) Disclosure regarding Corporate Social
Responsibility
 Details of Crypto Currency or Virtual
Currency

Amendment 6 COMPANIES TO USE The Ministry of Corporate Affairs vide Notification

ACCOUNTING dated 24 March 2021 has amended Companies
SOFTWARE WITH (Account) Amendment Rules, 2021, which shall be
AUDIT TRAIL OF effective from the 1st day of April 2021 for F.Y.
EACH
2021-22.
TRANSACTION.
First Amendment in Rule 3 i.e. Manner of Books of
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Account to be Kept in Electronic Mode. in Rule 3, in

sub-rule (1) the proviso shall be inserted:
New Proviso: Provided that for the financial year
commencing on or after the 1st day of April, 2021,
every company which uses accounting software for
maintaining its books of account, shall use only such
accounting software which has a feature of:-
Recording audit trail of each and every transaction,
Creating an edit log of each change made in books
of account along with,
The date when such changes were made and
Ensuring that the audit trail cannot be disabled.
Provision of Audit Trail, Rules shall come into
effect from 01st April, 2022.

Amendment 7 DISCLOSURES OF The Ministry of Corporate Affairs vide Notification

AUDITORS REPORT dated 24 March 2021 has amended Companies
(Audit and Auditors) Amendment Rules,, 2021,
which shall be effective from the 1st day of April
2021 for F.Y. 2021-22 except clause (g).
Amendment in Rule 11 i.e. Other Matters to be
Included in Auditors Report. In Rule 11.
Existing clause (d) shall be omitted.
New Clause (e), (f) & (g) inserted.
New Clause:
(e) (i) Whether the management has represented that,
to the best of it’s knowledge and belief, other than as
disclosed in the notes to the accounts, no funds have
been advanced or loaned or invested (either from
borrowed funds or share premium or any other
sources or kind of funds) by the company to or in
any other person(s) or entity(ies), including foreign
entities (“Intermediaries”), with the understanding,
whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the
company (“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of the
Ultimate Beneficiaries;
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(ii) Whether the management has represented, that,

to the best of it’s knowledge and belief, other than as
disclosed in the notes to the accounts, no funds have
been received by the company from any person(s) or
entity(ies), including foreign entities (“Funding
Parties”), with the understanding, whether recorded
in writing or otherwise, that the company shall,
whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party
(“Ultimate Beneficiaries”) or provide any guarantee,
security or the like on behalf of the Ultimate
Beneficiaries; and
Note: Auditor have to check the details in notes to
account and take a representation from director
about such clause and check all the transaction of
Company in respect of loan and advance received by
company & their respective documents.
(iii) Based on such audit procedures that the auditor
has considered reasonable and appropriate in the
circumstances, nothing has come to their notice that
has caused them to believe that the representations
under sub-clause (i) and (ii) contain any material
mis-statement. (applicable w.e.f. 01.04.2021)
(f) Whether the dividend declared or paid during the
year by the company is in compliance with section
123 of the Companies Act, 2013. (applicable w.e.f.
01.04.2021)
(g) Whether the company has used such accounting
software for maintaining its books of account which
has a feature of recording audit trail (edit log)
facility and the same has been operated throughout
the year for all transactions recorded in the software
and the audit trail feature has not been tampered with
and the audit trail has been preserved by the
company as per the statutory requirements for record
retention.]

Amendment 8 ANNUAL RETURN The Companies (Management and Administration)

OF ONE PERSON Amendment Rules, 2021 passed on 05 th March 2021.
COMPANY AND This Rule came into effect immediately on
SMALL COMAPNY publication of same in official gazette and applicable
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for F.Y. 2020-21.

Amendment in Rule 11 i.e. “Annual Return”: in rule
11 sub rule 1 has been substituted
New Rule:
 Every company shall file its annual return
in Form No.MGT-7 except
One Person Company (OPC) and
Small Company.
a)
b) One Person Company and Small Company
shall file annual return from the financial
year 2020-2021 onwards in Form No.MGT-
7A.

Amendment 9 INTRODUCTION OF (a) Every entity, covered under sub-rule (1) of Rule
E-FORM CSR-1 and 4 of Companies (Corporate Social Responsibility
Mandatory Policy) Amendment Rules, 2021, who intends to
Registration of NGO’s undertake any CSR activity, shall register itself with
with MCA for raising
the Central Government by filing the form CSR-1
CSR Funds.
electronically with the Registrar, with effect from
the 01st day of April 2021.
Provided that the provisions of this sub-rule shall not
affect the CSR projects or programmes approved
prior to the 01st day of April 2021.
(b) Form CSR-1 shall be signed and submitted
electronically by the entity and shall be verified
digitally by a Chartered Accountant in practice or a
Company Secretary in practice or a Cost Accountant
in practice.
(c) On the submission of the Form CSR-1 on the
portal, a unique CSR Registration Number shall be
generated by the system

Amendment 10 NEW ANNEXURE OF MCA has introduced “Companies (Corporate Social

CSR WITH Responsibility Policy), Amendment Rules, 2021.
DIRECTORS These rules came into effect on 22 January 2021, as
REPORT the same has been published in the official gazette
on the same date. Therefore, these amended rules are
applicable on the financial year 2020-21 (subject to
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specific date of some rules).

Directors Report:
The Company shall annex with its Board Report an
annual report on CSR in format of Annexure-I (for
F.Y. 2020-21) or in Annexure II (w.e.f. F.Y. 2021-
22).

Amendment 11 AMENDMENT IN After Rule 12 in Companies (Share Capital and

MINIMUM OFFER Debenture) Rules 2014 a new rule 12A shall be
PERIOD FOR RIGHT inserted
OFFER
Under (i) of clause (a) of sub-section (1) of section
62, the time period within which the offer shall be
made for acceptance shall be not less than seven
days from the date of offer which previously was of
15 days.

Amendment 12 AMENDMENT IN The MCA has notified vide notification dated 24 th

DISCLOSURE OF March 2021 amendment in the Companies
DIRECTOR REPORT (Account) Amendment Rules, 2021.

In rule 8 sub-rule 5 after clause X, the following

clauses has been inserted:

(xi) the details of application made or any

proceeding pending under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the year
along with their status as at the end of the financial
year.

(xii) the details of difference between amount of the

valuation done at the time of one time settlement and
the valuation done while taking loan from the Banks
or Financial Institutions along with the reasons
thereof.

 The above two clause shall require to be

included in the director report of the Company
along with the other disclosures with effect from
01.04.2021