Parliament Question: Compliance burden and awareness gaps

GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS RAJYA SABHA UNSTARRED QUESTION NO. 2763 ANSWERED ON TUESDAY, MARCH 17, 2026 COMPLIANCE BURDEN AND AWARENESS GAPS QUESTION 2763. Shri Anthiyur P. Selvarasu: Will the Minister of CORPORATE AFFAIRS be pleased to state: (a) whether Government has assessed compliance burden and awareness gaps among MSME- linked companies in Erode district, Tamil Nadu, including Erode city and Chennimalai; (b) if so, the details of Government helpdesks, facilitation camps, guidance provided and grievance support arrangements in Erode district; and (c) the steps proposed to be taken by Government to strengthen handholding, simplify compliance guidance and improve dispute resolution support in the said district? ANSWER THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD, TRANSPORT AND HIGHWAYS [SHRI HARSH MALHOTRA] (a) to (c): No such specific assessment has been done. However, the Ministry of Corporate Affairs (MCA) has been taking several measures for ease of doing business and to ease compliance burden for small companies in the entire country which is also applicable to Erode district, Tamil Nadu. Some of the important measures taken by MCA are at Annexure-I. Further, to reduce the compliance burden and the awareness gaps among MSMEs including companies, the Ministry of Micro, Small & Medium Enterprises has taken a number of steps including extensive stakeholder’s consultations with MSMEs, State Government, Industry Associations, Banks, Public Sector Undertakings and other relevant organizations across the country, including the Erode District, Tamil Nadu. Some of the important steps taken to streamline and simplify the compliance requirement for MSMEs in the country by Ministry of MSME are at Annexure-II. ******Annexure-I Annexure-I to the Rajya Sabha Unstarred Q. No. 2763 part (a) to (c) to be answered on 17th March, 2026 Some of the important steps taken by MCA for ease of doing business and to ease compliance burden for small companies Sr. Section Subject Provisions in the Company Act, 2013 to No. support small companies 1. 2 (40) proviso Financial Statement Requirement of cash flow statement to be part of financial statement made optional. 2. 92(1) Proviso Annual return (i) Shall be signed by a company secretary or where is there is no company secretary by a Director of the company. (ii) Abridged annual return prescribed for small companies. 3. 92(1)(g) Disclosure in annual Disclosure as to aggregate of amount of return about remuneration drawn by directors adequate remuneration of for small companies. directors 4. 134(3A) Board’s Report Abridged Board Report prescribed for small companies. 5. 139(2) read Rotation of auditors Rotation of auditors in small companies is with rule 5 of not mandatory. Companies (Audit and Auditors) rules, 2014 6. 141(3)(g) Restriction on auditor- Restriction w.r.t. maximum auditor-ships ships not applicable to auditors of small companies.Sr. Section Subject Provisions in the Company Act, 2013 to No. support small companies 7. 143(3)(i) Disclosure in Auditors These disclosures are not applicable for report on internal small companies. financial controls 8. 173 (5) Meetings of Under Companies Act, 2013, Board of Directors of a company are required to meet Board. at least once in 120 days, 4 board meetings in a year. However, in case of a small company, one board meeting in each half of a calendar year with a gap between two meetings of not less than 90 days is sufficient to comply with the requirement of section 173(5) of the Companies Act. 9. 233 Merger through Mergers between two or more small approval of RD companies or between one or more start-up company with one or more small company allowed through approval of RD. 10. 446B Lesser penalties Small companies are entitled for lesser penalties as per section 446B. 11. Rule 8(12)(a) Companies Small companies are exempted from (Registration offices requirements w.r.t. pre-certification of forms and Fees) amendment by professionals. Rules, 2014 12. Annexure- Companies Lesser fees allowed for small companies. (Registration offices Table of fees and Fees) amendment Rules, 2014 13. Clause 1(2)(iv) Companies The Companies (Auditor’s Report) Order (CARO) 2020 is not applicable on small (Auditor's Report) companies Order, 2020 (CARO 2020)Sr. Section Subject Provisions in the Company Act, 2013 to No. support small companies 14. Incorporation Zero fee is charged for incorporation of all of small companies with authorized capital up to Rs. companies 15 lakh or with up to 20 members where no share capital is applicable. 15. Specified MSME Form-1 vide MCA has notified revised MSME Form-1. Companies Notification S.O. Companies having outstanding payments to (Furnishing of 2751(E) dated Micro or Small Enterprise suppliers for more information 15.07.2024 than 45 days from the date of acceptance or about payment deemed acceptance of goods or services, as to Micro and Small per section 9 of the MSMED Act, 2006, are Enterprise required to furnish such details in MSME Suppliers) Form-1. Amendment Order, 2024 16. Section 2(85) Definition of Small With effect from 1st December 2025, the read with The Company thresholds for classification of small Companies (Amendment) companies have been enhanced. The paid-up (Specification capital limit has been increased from up to ₹4 of Definitions crore to up to ₹10 crore and the turnover limit Details) Rules, from up to ₹40 crore to up to ₹100 crore, 2014 thereby bringing more companies under the definition of small company and reducing their compliance burden. 17. NA Helpdesk mechanism. A helpdesk mechanism has been established to address grievances of companies related to the MCA21 portal. Grievances, covering technical issues, processing-related requests and stakeholder suggestions or feedback can be raised through the MCA website as well as through a toll-free number, ensuring access for stakeholders across various locations, including Erode district. The helpdesk system also incorporates a user feedback mechanism to assess the quality of resolutions.Annexure-II Annexure-II to the Rajya Sabha Unstarred Q. No. 2763 part (a) to (c) to be answered on 17th March, 2026 Some of the important steps taken to streamline and simplify the compliance requirement for MSMEs i. New revised criteria for classification of MSMEs. ii. Registration of MSMEs through ''Udyam Registration Portal''. Udyam Registration is a simple, online registration of an enterprise, based on self–declaration and has provided Ease of Doing Business to the MSME sector. iii. Launch of Udyam Assist Platform, on 11.01.2023, for bringing Informal Micro Enterprises (IMEs) in the formal ambit. iv. Non-tax benefits extended for 3 years in case of an upward change in status of MSMEs. v. Launch of an online Portal “Champions” to cover many aspects of e-governance including redressing grievances and handholding of MSMEs. vi. The Ministry of MSME has also pioneered the development of the first-of-its-kind Online Dispute Resolution (ODR) portal to facilitate the speedy and efficacious resolution of delayed payment disputes through the comfort of the home or office of micro or small enterprises. (https://odr.msme.gov.in)