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published on 30 April 2025 I reading time approx. 9 minutes

Company Law Updates

1.Ministry of Corporate Affairs (MCA) provides extension of time to private limited companies for dematerialization of shares

As per the provisions of the Companies Act 2013 every private limited company which is not a “Small Company” (which means all foreign invested companies have this obligation) as on 31 March 2023, is required to issue the securities such as shares, debentures etc. only in dematerialized form and facilitate dematerialization of all its securities by 30 September 2024. MCA granted an extension by latest notification issued on 12 February 2025. Accordingly, the deadline for compliance of provisions of dematerialization of shares has been extended from 30 September 2024 to 30 June 2025.

FEMA Updates

1. Reserve Bank of India (RBI) provides greater flexibility to Indian exporters in managing foreign currency receipts and payments:

On 14 January 2025, the RBI issued a notification amending the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015, vide the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India (Fifth Amendment) Regulations 2025. The amended regulation is a welcome move, enabling Indian resident exporters to open, hold and maintain a foreign currency account with banks outside India pertaining to their export transactions, and no longer limited to construction contracts or turnkey projects as was the case under the erstwhile regulation. Under the amended framework, such foreign currency accounts may be used for collecting export proceeds and receiving advance payments for goods or services to be exported. The notification also specifies that the funds held in these accounts can be utilized towards making payments for imports into India or repatriated into India within a period not exceeding the end of the next month from the date of receipt of the funds after adjusting for forward commitments, subject to compliance with the applicable requirements for realization and repatriation as specified in Regulation 9 of Foreign Exchange Management(Export of Goods and Services) Regulations, 2015.

2. RBI amends regulations to ease cross-border transactions:

On 14 January 2025, RBI amended the Foreign Exchange Management(Deposit) Regulations,2016 through the Foreign Exchange Management (Deposit)(Fifth Amendment) Regulations,2025, introducing several key changes aimed at facilitating cross-border trade transactions. One of the key amendments permits the opening of Special Non-Resident Rupee (SNRR) Account not only with authorized dealer (AD) banks in India but also with their branches located outside India. Further, in a significant shift from the earlier framework, the amendment removes the earlier restriction that allowed SNRR Accounts to be opened only for specified bonafide business interests. The revised regulation now permits the opening of such accounts for all permissible current and capital account transactions, thereby broadening the scope of use for these accounts. The tenure for the SNRR Account has been prescribed to be in line with the tenure of the contract/period of operation/business of the account holder.

3. RBI aims to streamline foreign investments in non-debt instruments:

Vide notification dated 14 January 2025, RBI introduced amendments to the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations 2019 by releasing the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments)(Third Amendment) Regulations 2025. The amendments aim to streamline the payment mechanisms and reporting requirements applicable to investments made by persons resident outside India. Key updates include revised rules and conditions introduced under various schedules to enhance procedural clarity, operational flexibility, and efficiency in managing foreign investments and transactions, while ensuring compliance with the Foreign Exchange Management Act, 1999. To enhance transparency in foreign investments in non-debt instruments, the amended regulations specify the modes of payment and repatriation of sale proceeds for the following categories of transactions:

- Purchase or sale of equity instruments of an Indian company by a person resident outside India

- Investments by Foreign Portfolio Investors

- Investment in a Limited Liability Partnership

- Investment by a Foreign Venture Capital Investor

- Investment by a person resident outside India in an Investment Vehicle

- Issue of Indian Depository Receipts

- Issue of Convertible Notes by an Indian start-up company.

4. RBI issues master direction towards non-resident investments in debt instruments:

The RBI has issued various circulars since 2008 to regulate investments by non-residents in debt securities. These circulars have now been consolidated and issued as a Master Direction on 7 January 2025- Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025, forming a consolidated framework for investments in various Indian debt instruments by non-residents.

5. RBI regulates payments between Asian Clearing Union (ACU) member countries

In order to streamline the transactions between the members of the ACU countries, RBI has amended the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 through notifying the Foreign Exchange Management (Manner of Receipt and Payment) (Amendment) Regulations, 2025 dated 4 February 2025.

The amended regulation provides that all payments between residents of different ACU participant countries (excluding Nepal and Bhutan) should be made through the ACU system or as per the directions issued by RBI to authorized dealer (AD) banks, from time to time.

Company Secretarial (CS) Compliance for Private Limited Companies

Below is a summary of the compliances that need to be adhered to in the next quarter (April – June 2025):

Particulars	Due Date
Hold at least one Board Meeting in the quarter 1 April 2025- 30 June 2025	30 June 2025
Disclosure of interest in Form MBP-1	To be placed in the first board meeting of the financial year 2025-26
Form MSME- I: (Form for furnishing outstanding payments to Micro or Small Enterprises with the Registrar for the period 01 October 2024 to 31 March 2025)	30 April 2025
Form DPT-3 (Return of Deposits)	30 June 2025
Form ECB-2 Returns	In case External Commercial Borrowings (ECB), commercial loans are availed by eligible resident entities from recognized non-resident lenders, such resident entities are required to file Form ECB-2 Return within 7 (seven) working days from the closing date of each month.
Dematerialisation of Shares	30 June 2025

Insolvency and Bankruptcy Code (IBC) Updates

1.Supreme Court Mandates Competition Commission of India (CCI) Approval for IBC Resolution Plans Involving Combinations

The Supreme Court issued an important decision concerning combinations of any sort in Independent Sugar Corporation Limited v. Girish Shriram Juneja and ORS. (2025 INSC 124). According to the ruling, approval for any resolution plan involving combinations must be taken from the CCI before presenting the said plan before the Committee of Creditors (“CoC”). This is a change from the previously used procedure where the resolution plan was submitted directly to the CoC, with approval from the CCI coming at a later stage.

Labour and Industrial Updates

1. Increase in amount of Labour Welfare Fund Contributions in Karnataka:

Government of Karnataka vide notification dated 10 January 2025 has amended section 7A (2) of the Karnataka Labour Welfare Fund Act, 1965. Through this amendment Government of Karnataka has increased the contribution rates at which the contribution is required to be made by the employee and the employer respectively. The employee contributions have been increased from INR 20/- to INR 50/- and employer contributions from INR 40/- to INR 100/-. A press note on 24 December 2024, mandated that all contributions must be remitted online to the Karnataka Labour Welfare Fund.

2. Revision to the quantum of Labour Welfare Fund Contributions by the Haryana Government:

Through a notification dated 7 March 2025, the Haryana Government has revised the rates for employees and employers concerning the deposit of labour welfare fund contributions, effective from 1 January 2025. As per the amendment, the maximum limit for the employees' contribution has been increased to INR 34/- (Indian Rupees Thirty-Four Only), calculated at the rate of 0.2% of their monthly salary, wages, or remuneration, from the previous limit of INR 31/- (Indian Rupees Thirty-One Only). Consequently, the employers' contribution for each employee will be calculated at twice the employee's contribution, will be maximum of INR 68/- (Indian Rupees Sixty-Eight Only).

3. Gratuity forfeiture permissible without criminal conviction for misconduct involving moral turpitude/ Criminal conviction not necessary for forfeiture of gratuity:

In the case of Western Coal Fields Ltd. v. Manohar Govinda Fulzele 2025, SCC Online SC 345, the Hon’ble Supreme Court has held that for forfeiture of gratuity under the Payment of Gratuity Act, 1972, criminal conviction will not act as a prerequisite. Supreme Court further made clarification that gratuity can be forfeited when the misconduct done by the employee constitutes an offense which involves moral turpitude. It can be inferred from this decision of the Supreme Court that an employer can withhold gratuity even when a formal criminal conviction has not yet been made.

4. The Maharashtra Government releases the Maharashtra Minimum Wages 2025 Notification:

The Maharashtra Government has revised the wage rates vide Maharashtra Wage Rates 2025 notification for the period from 1 January 2025 to 30 June 2025 under the Minimum Wages Act, 1948. This amendment brings 5 per cent to 7 per cent increase in the minimum wage rates across all categories of industries.

Consumer Law Updates

1. Bureau of Indian Standards establishes new standards for overall occupational health and safety of workers:

The BIS established 3 (three) new standards for- Respiratory Protection, Fall Prevention, and Fire Safety in order to enhance occupational health and safety for workers. The requirements for Respiratory Protection specify the selection, use, and maintenance of respiratory protective gadgets to prevent damage from airborne contaminants and oxygen-deficient environments. The fall prevention standards have been introduced for private fall arrest systems, guardrails, and protection nets and others. The fireplace safety requirements aim to prevent burns, smoke inhalation, and other fire associated risks by ensuring the standards of the firefighter suits, gloves, footwear, non-steel headgear.

2. Centre issues new timeline structure for implementing Legal Metrology (Packaged Commodities) Rules, 2011:

On 29 January 2025 the Ministry of Consumer Affairs, Food and Public Distribution (MCAFPD) announced a structured timeline for compliance with amendments in labelling provisions under the Legal Metrology (Packaged Commodities) Rules, 2011. To ensure smooth implementation, any changes to labelling provisions will only take effect on either 1 January or 1 July of a given year. The amendment will be followed by a transition period of at least 180 (One Hundred and Eighty) days from the date of the announcement. Companies are thus provided with ample time to adapt to the changes illustrating the Government's dedication to customer welfare.

3. The Union Ministry of New and Renewable Energy (MNRE) Issues Revised Quality Control Order for Solar Photovoltaic Products Supreme Court Ruling on Privity of Contract in Consumer Protection:

The Union Ministry of New and Renewable Energy (MNRE) issued the Solar Systems, Devices, and Components Goods Order, 2025, with an aim to revise and supersede the previous Solar Photovoltaics (PV) Systems, Devices, and Components Goods (Requirements for Compulsory Registration) Order, 2017. This updated Quality Control Order (QCO) influences the required standards for Solar PV modules, inverters, and storage batteries. The products must conform to the latest Indian Standards and bear the Standard Mark under a license from the BIS. The minimum efficiency criteria for solar PV modules are set at 18 per cent for Mono Crystalline Silicon and Thin-Film PV Modules, and 17 per cent for Poly Crystalline Silicon PV Modules. The order will come into effect 180 (One Hundred and Eighty) days from its publication on 27 January 2025.

Environmental Law Updates

1. Updated Methodology for Classifying Industries Based on Pollution Potential:

The Central Pollution Control Board (CPCB) altered its approach for identifying corporations primarily based on pollution ability, utilizing a Cumulative Pollution Index (PI) based on water, air, and waste pollutant ratings. The industries are categorized as Red (PI >80), Orange (PI >55 but <80), Green (PI >25 but <55), White (PI <25), and a new blue category for Essential Environmental Services. Incentives are provided for ecologically beneficial behavior. This new framework is an important step in the direction of greater effective and nuanced environmental law in India, encouraging businesses to undertake sustainable practices and lessen their environmental impact.

2. New Guidelines for Issuance of Consent under the Air and Water Act:

The Ministry of Environment, Forest, and Climate Change (MoEF&CC) has introduced the Control of Air Pollution (Grant, Refusal or Cancellation of Consent) Guidelines, 2025 and the Control of Water Pollution (Grant, Refusal or Cancellation of Consent) Guidelines, 2025, effective January 2025, to regulate industrial approvals impacting air and water quality. These guidelines mandate that businesses submit applications in prescribed forms, to obtain the Consent to Establish (CTE) valid for 5 (five) years and extendable by an additional 2 (two) years. The Consent to Operate (CTO) being granted will vary by industry category—Red (5 years), Orange (10 years), Green (15 years), and Blue (17 years). State Pollution Control Boards may conduct site inspections to verify compliance, including adherence to location norms and installation of approved pollution control systems, while fees will be state determined. Non-compliance may result in refusal or revocation of consent as per the prescribed timeline.

3. New Labelling Guidelines for Plastic Waste Management:

On 23 January 2025, the MoEF&CC announced the Plastic Waste Management (Amendment) Rules 2025, which enhance transparency for manufacturers, importers, and brand owners. Beginning 1 July 2025, they must print required information under Rule 11 using a barcode, product brochure, or unique number and notify the CPCB, which will publish a quarterly updated list of complying firms. This amendment seeks to promote responsibility and traceability in plastic packaging while also supporting sustainable practices and compliance with environmental rules. The CPCB's list will be public, promoting compliance with the new labelling regulations.

4. Battery Waste Management Rules Amended:

The MoEF&CC on 24 February 2025, revised the Battery Waste Management Rules, 2022. This revision mandates a requirement for a barcode or QR code including the EPR registration number on batteries, battery packs, and related packaging. This amendment seeks to improve traceability and accountability in battery waste management while guaranteeing compliance with Extended Producer Responsibility (EPR) requirements. The inclusion of EPR registration numbers in product information pamphlets will help with monitoring and enforcement, as well as promoting safe battery disposal and recycling, hence decreasing environmental hazards due to battery waste.

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