MCA Notified Companies (Accounts) Second Amendment Rules, 2025

MCA Notified Companies (Accounts) Second Amendment Rules, 2025. Recently, the Ministry of Corporate Affairs (MCA) has officially notified the Companies (Accounts) Second Amendment Rules, 2025, which bring about important updates to statutory disclosures and digital compliance obligations under the Companies Act, 2013. These amendments will come into force from 14th July 2025 and will apply to all companies that fall within the purview of the applicable provisions. This move reflects the government’s ongoing efforts to increase accountability, digitise statutory filings, and promote a safer and more inclusive work environment. In this article, we break down each major update introduced by the Companies (Accounts) Second Amendment Rules, 2025 in an easy-to-understand manner.
Electronic Filing of Forms AOC-1 and AOC-2
Under the new rules, the Ministry has made it mandatory for companies to file Forms AOC-1 and AOC-2 electronically. This marks a significant shift from the earlier process, where companies often included these disclosures in physical or manually prepared attachments to their Board Reports.
Form AOC-1
It relates to the statement of salient features of the financial statements of the company’s subsidiaries, associate companies, or joint ventures. It ensures that shareholders and stakeholders have visibility into the financial health and position of related entities in the corporate structure.
Form AOC-2
It pertains to the particulars of contracts or arrangements entered into by the company with related parties, as per Section 188(1) of the Companies Act, 2013. These disclosures are vital to avoid conflicts of interest and to ensure that all such dealings are conducted transparently.
The move to electronic filing aims to improve efficiency, reduce paperwork, and ensure that records are maintained in a more structured and accessible manner. Digital records also facilitate better oversight and faster data retrieval for regulatory purposes.
Mandatory Disclosures on Sexual Harassment Complaints
An important update in the Companies (Accounts) Second Amendment Rules, 2025 is the mandatory inclusion of disclosures related to sexual harassment complaints in the Board’s Report. These disclosures have been mandated in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The new rules require every company to disclose the following in their Board Report:
Number of complaints related to sexual harassment received during the financial year
Companies must transparently mention how many complaints were formally registered under the POSH Act. This reflects the company's willingness to acknowledge and act upon grievances.
Number of complaints disposed of during the year
This indicates the effectiveness and timeliness of the internal complaints committee (ICC) in resolving such issues.
Number of complaints pending for more than 90 days
This particular disclosure is intended to highlight any delay or inaction by companies in addressing workplace harassment complaints. It ensures timely resolution and reflects the seriousness with which a company treats such matters. These additions to the Board Report aim to ensure greater corporate accountability and reinforce safe and respectful working conditions for all employees, particularly women.
Compliance Statement on the Maternity Benefit Act, 1961
Another key insertion under the Companies (Accounts) Second Amendment Rules, 2025 is the requirement for companies to include a compliance statement with the Maternity Benefit Act, 1961 in the Board’s Report. The Maternity Benefit Act, 1961 mandates benefits such as paid maternity leave, medical bonus, nursing breaks, and provision of creche facilities (for companies meeting specified thresholds).
The Board’s Report must now include a formal declaration stating that the company is in full compliance with the provisions of this Act. This ensures that organisations are providing a fair and supportive environment to their women employees during and after pregnancy.
The compliance statement must confirm that:

The company provides maternity leave as mandated by the Act.

Necessary facilities and entitlements under the law are provided to women employees.

No discriminatory practices are followed against women employees due to maternity or childbirth.

By including this statement, companies show their commitment to gender equality and women’s welfare at the workplace.
Filing of Extracts of Board Report and Auditor’s Report
The new amendment also brings in a requirement to file specific extracts electronically. Companies must now file:

Extract of the Board Report along with Form AOC-1 and Form AOC-2. This extract must contain all the relevant disclosures, including those about sexual harassment complaints and maternity benefit compliance.

Extract of Auditor's Report (Standalone): This involves submitting the key observations and audit opinions of the statutory auditor for the company’s standalone financial statements.

Extract of Auditor’s Report (Consolidated): If the company has subsidiaries or associate entities, the consolidated audit report extract must also be electronically filed.

This structured reporting approach allows for more consistent disclosures and ensures that stakeholders can easily access important financial and compliance information about the company.
Objectives of the Amendment
The objectives behind the Companies (Accounts) Second Amendment Rules, 2025 are clear and multifaceted:

Enhancing transparency by digitising key statutory disclosures.

Upholding accountability by mandating disclosures on workplace conduct and employee rights.

Promoting gender inclusivity through focus on sexual harassment and maternity benefit compliance.

Ensuring better governance by tightening corporate reporting practices.

By bringing these aspects under formal and electronic disclosure, the MCA is aiming for a more responsible and transparent corporate environment in India.
Effective Date of the Companies (Accounts) Second Amendment Rules, 2025
The Companies (Accounts) Second Amendment Rules, 2025 will officially come into effect from 14th July 2025. From this date onwards, companies will be legally bound to comply with the new disclosure requirements and filing mandates.
It is advised that companies begin preparing in advance by:

Reviewing internal policies and mechanisms related to sexual harassment and maternity benefit.

Ensuring accurate documentation and data collection related to subsidiary financials and related party transactions.

Setting up internal compliance teams to prepare extracts of Board and Auditor’s Reports in the prescribed format.

Adapting their filing systems to accommodate the new electronic submission requirements.

Conclusion
The Companies (Accounts) Second Amendment Rules, 2025 signify a progressive step towards better corporate governance, employee welfare, and regulatory efficiency. Companies must take proactive steps to implement internal mechanisms that support timely and accurate disclosures. From ensuring workplace safety for women to embracing digitisation of statutory forms, these rules represent a holistic enhancement of the corporate compliance ecosystem. Companies are encouraged to engage with their legal and compliance advisors to ensure seamless transition and adherence to the new rules. With effective planning and strong reporting structures, compliance with the Companies (Accounts) Second Amendment Rules, 2025 will not only help avoid penalties but also boost the company’s reputation in the eyes of regulators and stakeholders alike.
If you have any queries or need any support, then you can book a consultation with Compliance Calendar LLP experts through mail at info@ccoffice.in or Call/Whatsapp at +91 9988424211.

FAQs
Q1. What are the Companies (Accounts) Second Amendment Rules, 2025?
Ans. The Companies (Accounts) Second Amendment Rules, 2025 are changes notified by the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013. These rules amend the existing Companies (Accounts) Rules, 2014 to enhance transparency, accountability, and compliance in the preparation and filing of financial statements by companies.
Q2. When did the Second Amendment Rules, 2025 come into effect?
Ans. The Companies (Accounts) Second Amendment Rules, 2025 were notified via MCA Notification dated [insert notification date, once officially published] and came into effect from the same date unless otherwise specified in the notification.
Q3. What is the key highlight of this amendment?
Ans. One of the key highlights is the mandatory reporting of compliance with Indian Accounting Standards (Ind AS) in a more detailed manner, especially for listed and large unlisted companies. It also emphasizes enhanced disclosures for ESG (Environmental, Social, and Governance) compliance and digitized record-keeping.
Q4. Which companies are affected by the Second Amendment Rules, 2025?
Ans. The amendment primarily applies to:

Listed companies and their subsidiaries,

Unlisted public companies with paid-up capital above Rs.10 crore or turnover exceeding Rs.100 crore,

Companies required to comply with Ind AS,

Companies maintaining records in electronic format under Rule 3.

Q5. Is ESG disclosure mandatory under these new rules?
Ans. Yes, for companies falling within the specified thresholds (such as large unlisted public companies and all listed entities), ESG reporting in the Board’s Report or in a separate ESG annexure is now mandatory under the revised rules. The disclosures must align with national guidelines or SEBI requirements where applicable.
Q6. Have there been any changes to the maintenance of books of accounts?
Ans. Yes. The amendment mandates that companies maintaining books of account in electronic form must now ensure:

Real-time backup of records,

Data localization within Indian servers,

Audit trail functionality (edit log) for key financial records.

This strengthens digital compliance and data security norms.
Q7. What are the penalties for non-compliance with the Second Amendment Rules, 2025?
Ans. Non-compliance with the amended rules will attract penalties under Section 128 and Section 134 of the Companies Act, 2013. This may include monetary fines on both the company and its responsible officers (such as the Managing Director, CFO, and directors in default), with potential prosecution in serious cases.

Recently, the Ministry of Corporate Affairs (MCA) has officially notified the Companies (Accounts) Second Amendment Rules, 2025, which bring about important updates to statutory disclosures and digital compliance obligations under the Companies Act, 2013. These amendments will come into force from 14th July 2025 and will apply to all companies that fall within the purview of the applicable provisions. This move reflects the government’s ongoing efforts to increase accountability, digitise statutory filings, and promote a safer and more inclusive work environment. In this article, we break down each major update introduced by the Companies (Accounts) Second Amendment Rules, 2025 in an easy-to-understand manner.

Electronic Filing of Forms AOC-1 and AOC-2

Under the new rules, the Ministry has made it mandatory for companies to file Forms AOC-1 and AOC-2 electronically. This marks a significant shift from the earlier process, where companies often included these disclosures in physical or manually prepared attachments to their Board Reports.

Form AOC-1

It relates to the statement of salient features of the financial statements of the company’s subsidiaries, associate companies, or joint ventures. It ensures that shareholders and stakeholders have visibility into the financial health and position of related entities in the corporate structure.

Form AOC-2

It pertains to the particulars of contracts or arrangements entered into by the company with related parties, as per Section 188(1) of the Companies Act, 2013. These disclosures are vital to avoid conflicts of interest and to ensure that all such dealings are conducted transparently.

The move to electronic filing aims to improve efficiency, reduce paperwork, and ensure that records are maintained in a more structured and accessible manner. Digital records also facilitate better oversight and faster data retrieval for regulatory purposes.

Mandatory Disclosures on Sexual Harassment Complaints

An important update in the Companies (Accounts) Second Amendment Rules, 2025 is the mandatory inclusion of disclosures related to sexual harassment complaints in the Board’s Report. These disclosures have been mandated in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The new rules require every company to disclose the following in their Board Report:

Number of complaints related to sexual harassment received during the financial year

Companies must transparently mention how many complaints were formally registered under the POSH Act. This reflects the company's willingness to acknowledge and act upon grievances.

Number of complaints disposed of during the year

This indicates the effectiveness and timeliness of the internal complaints committee (ICC) in resolving such issues.

Number of complaints pending for more than 90 days

This particular disclosure is intended to highlight any delay or inaction by companies in addressing workplace harassment complaints. It ensures timely resolution and reflects the seriousness with which a company treats such matters. These additions to the Board Report aim to ensure greater corporate accountability and reinforce safe and respectful working conditions for all employees, particularly women.

Compliance Statement on the Maternity Benefit Act, 1961

Another key insertion under the Companies (Accounts) Second Amendment Rules, 2025 is the requirement for companies to include a compliance statement with the Maternity Benefit Act, 1961 in the Board’s Report. The Maternity Benefit Act, 1961 mandates benefits such as paid maternity leave, medical bonus, nursing breaks, and provision of creche facilities (for companies meeting specified thresholds).

The Board’s Report must now include a formal declaration stating that the company is in full compliance with the provisions of this Act. This ensures that organisations are providing a fair and supportive environment to their women employees during and after pregnancy.

The compliance statement must confirm that:

The company provides maternity leave as mandated by the Act.
Necessary facilities and entitlements under the law are provided to women employees.
No discriminatory practices are followed against women employees due to maternity or childbirth.

By including this statement, companies show their commitment to gender equality and women’s welfare at the workplace.

Filing of Extracts of Board Report and Auditor’s Report

The new amendment also brings in a requirement to file specific extracts electronically. Companies must now file:

Extract of the Board Report along with Form AOC-1 and Form AOC-2. This extract must contain all the relevant disclosures, including those about sexual harassment complaints and maternity benefit compliance.
Extract of Auditor's Report (Standalone): This involves submitting the key observations and audit opinions of the statutory auditor for the company’s standalone financial statements.
Extract of Auditor’s Report (Consolidated): If the company has subsidiaries or associate entities, the consolidated audit report extract must also be electronically filed.

This structured reporting approach allows for more consistent disclosures and ensures that stakeholders can easily access important financial and compliance information about the company.

Objectives of the Amendment

The objectives behind the Companies (Accounts) Second Amendment Rules, 2025 are clear and multifaceted:

Enhancing transparency by digitising key statutory disclosures.
Upholding accountability by mandating disclosures on workplace conduct and employee rights.
Promoting gender inclusivity through focus on sexual harassment and maternity benefit compliance.
Ensuring better governance by tightening corporate reporting practices.

By bringing these aspects under formal and electronic disclosure, the MCA is aiming for a more responsible and transparent corporate environment in India.

Effective Date of the Companies (Accounts) Second Amendment Rules, 2025

The Companies (Accounts) Second Amendment Rules, 2025 will officially come into effect from 14th July 2025. From this date onwards, companies will be legally bound to comply with the new disclosure requirements and filing mandates.

It is advised that companies begin preparing in advance by:

Reviewing internal policies and mechanisms related to sexual harassment and maternity benefit.
Ensuring accurate documentation and data collection related to subsidiary financials and related party transactions.
Setting up internal compliance teams to prepare extracts of Board and Auditor’s Reports in the prescribed format.
Adapting their filing systems to accommodate the new electronic submission requirements.

Conclusion

The Companies (Accounts) Second Amendment Rules, 2025 signify a progressive step towards better corporate governance, employee welfare, and regulatory efficiency. Companies must take proactive steps to implement internal mechanisms that support timely and accurate disclosures. From ensuring workplace safety for women to embracing digitisation of statutory forms, these rules represent a holistic enhancement of the corporate compliance ecosystem. Companies are encouraged to engage with their legal and compliance advisors to ensure seamless transition and adherence to the new rules. With effective planning and strong reporting structures, compliance with the Companies (Accounts) Second Amendment Rules, 2025 will not only help avoid penalties but also boost the company’s reputation in the eyes of regulators and stakeholders alike.

If you have any queries or need any support, then you can book a consultation with Compliance Calendar LLP experts through mail at info@ccoffice.in or Call/Whatsapp at +91 9988424211.

FAQs

Q1. What are the Companies (Accounts) Second Amendment Rules, 2025?

Ans. The Companies (Accounts) Second Amendment Rules, 2025 are changes notified by the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013. These rules amend the existing Companies (Accounts) Rules, 2014 to enhance transparency, accountability, and compliance in the preparation and filing of financial statements by companies.

Q2. When did the Second Amendment Rules, 2025 come into effect?

Ans. The Companies (Accounts) Second Amendment Rules, 2025 were notified via MCA Notification dated [insert notification date, once officially published] and came into effect from the same date unless otherwise specified in the notification.

Q3. What is the key highlight of this amendment?

Ans. One of the key highlights is the mandatory reporting of compliance with Indian Accounting Standards (Ind AS) in a more detailed manner, especially for listed and large unlisted companies. It also emphasizes enhanced disclosures for ESG (Environmental, Social, and Governance) compliance and digitized record-keeping.

Q4. Which companies are affected by the Second Amendment Rules, 2025?

Ans. The amendment primarily applies to:

Listed companies and their subsidiaries,
Unlisted public companies with paid-up capital above Rs.10 crore or turnover exceeding Rs.100 crore,
Companies required to comply with Ind AS,
Companies maintaining records in electronic format under Rule 3.

Q5. Is ESG disclosure mandatory under these new rules?

Ans. Yes, for companies falling within the specified thresholds (such as large unlisted public companies and all listed entities), ESG reporting in the Board’s Report or in a separate ESG annexure is now mandatory under the revised rules. The disclosures must align with national guidelines or SEBI requirements where applicable.

Q6. Have there been any changes to the maintenance of books of accounts?

Ans. Yes. The amendment mandates that companies maintaining books of account in electronic form must now ensure:

Real-time backup of records,
Data localization within Indian servers,
Audit trail functionality (edit log) for key financial records.

This strengthens digital compliance and data security norms.

Q7. What are the penalties for non-compliance with the Second Amendment Rules, 2025?

Ans. Non-compliance with the amended rules will attract penalties under Section 128 and Section 134 of the Companies Act, 2013. This may include monetary fines on both the company and its responsible officers (such as the Managing Director, CFO, and directors in default), with potential prosecution in serious cases.