MCA Updates Form CRL-1 to Enhance Subsidiary Disclosure Requirements

Introduction

In a significant move to enhance corporate transparency and regulatory oversight, the Ministry of Corporate Affairs (MCA) has notified an amendment to the Companies (Restriction on Number of Layers) Rules, 2017 through Notification No. G.S.R. 427(E) dated June 27, 2025.

This amendment substitutes Form CRL-1 with a revised version, mandating expanded disclosures on subsidiary structures and ownership details. The change aligns with the Government of India’s broader objective of curbing illicit financial flows, eliminating shell companies, and promoting transparent and accountable business practices.

What Has Changed in Form CRL-1?

The revised Form CRL-1 requires companies to disclose comprehensive information relating to their subsidiary and holding structures. Newly introduced disclosures include:

Ownership percentage in each subsidiary
Level or layer of every subsidiary
Details of holding and ultimate holding companies
Registered office address
Official company email ID

These enhancements provide regulators with deeper visibility into complex corporate arrangements and help prevent misuse of layered structures for tax evasion, money laundering, or concealment of control.

Regulatory Background: Restriction on Corporate Layering

Restrictions on corporate layering were introduced to address risks associated with complex group structures, such as:

Concealment of beneficial ownership
Facilitation of tax evasion or money laundering
Avoidance of regulatory oversight
Obscuring control relationships within business groups

Under the Companies Act, 2013, the Central Government is empowered to prescribe limits on the number of subsidiary layers. Accordingly, the MCA introduced the Companies (Restriction on Number of Layers) Rules, 2017, along with Form CRL-1 as the prescribed reporting mechanism.

Understanding Form CRL-1

Form CRL-1 is a statutory compliance form used by companies to report:

The number of subsidiary layers, and
Details of subsidiaries, including ownership, control, and structure

The form enables the MCA to monitor compliance with the restriction on subsidiary layers. Under the 2017 Rules, most Indian companies were restricted from having more than two layers of subsidiaries, subject to specified exemptions.

The 2025 amendment replaces the earlier form with a significantly more detailed reporting format.

Key Additions in the Revised Form CRL-1

1. Subsidiary Details

Companies must now disclose:

Name of subsidiary
Corporate Identification Number (CIN)
Ownership percentage
Level or layer (1st, 2nd, etc.)
Date of incorporation or acquisition

2. Holding and Ultimate Holding Company Details

The revised form requires:

Name and CIN of the holding company
Details of the ultimate parent entity
Nature of control and shareholding pattern

This is particularly relevant in cases involving indirect or foreign ownership.

3. Registered Office Address

Mandatory disclosure of:

Complete registered office address
Registrar of Companies (RoC) jurisdiction

This supports jurisdictional tracking and verification.

4. Official Company Email ID

Companies must now provide an official email ID to facilitate:

Faster regulatory communication
Digital notices and official correspondence

Objective of the 2025 Amendment

The revised Form CRL-1 aims to strengthen corporate governance and regulatory monitoring by:

Enhancing transparency in group structures
Enabling better traceability of ownership and control
Preventing misuse of shell or dormant entities
Aligning India’s regulatory framework with global AML/CFT standards, including FATF recommendations

Applicability of Revised Form CRL-1

The revised Form CRL-1 is mandatory for:

Companies with more than one layer of subsidiaries
Companies forming new subsidiaries
Companies undergoing mergers, acquisitions, or restructuring involving subsidiaries

Exemptions

Generally exempt entities include:

Government companies
Banking companies
Insurance companies
Non-Banking Financial Companies (NBFCs)
Companies acquiring subsidiaries through court-approved schemes

Note: Exemptions are subject to change based on MCA notifications and should be reviewed periodically.

Filing Timeline

Companies must file Form CRL-1:

Within 30 days of forming or modifying subsidiary structures
Annually or as directed by the MCA

The form must be filed electronically on the MCA21 portal and digitally signed by a Director or Company Secretary. In certain cases, certification by a practising CA, CS, or CMA may be required.

Documents Required for Filing

Key documents include:

Board resolution authorising filing
Detailed list of subsidiaries with CIN and ownership structure
Organisational or ownership structure chart
Declaration confirming accuracy of disclosures
Incorporation certificates of subsidiaries (if applicable)
Details of the ultimate holding company
Proof of registered office address and official email ID

Additional documentation may be required for foreign subsidiaries or restructuring transactions.

How to File Form CRL-1

Log in to the MCA21 portal
Download the latest Form CRL-1
Enter subsidiary, holding, and ownership details
Attach required documents and declarations
Digitally sign the form
Obtain professional certification, if applicable
Upload the form and pay filing fees
Generate SRN and acknowledgement

Accurate and up-to-date disclosures are essential to avoid penalties or regulatory scrutiny.

Consequences of Non-Compliance

Failure to comply with Form CRL-1 requirements may result in:

Penalties under Section 450 of the Companies Act, 2013
Fines on the company and officers in default
Regulatory investigations (SFIO, Income Tax Department, etc.)
Director disqualification in cases of repeated or wilful default

Key Takeaways

MCA has introduced a revised Form CRL-1 effective June 27, 2025
Enhanced disclosures on subsidiaries, ownership, and holding structures are mandatory
Registered office address and official email ID are newly required
Filing is mandatory within 30 days of structural changes
Electronic filing via MCA21 with digital signatures is required

Need Assistance with Form CRL-1?

Ensure timely and accurate compliance with the revised Form CRL-1 to avoid penalties and regulatory action. Whether you are restructuring, adding subsidiaries, or updating disclosures, Auriga Accounting pvt. ltd. ’ experts can help you file correctly and efficiently.

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About the Author

Dakesh

Dakesh breaks down complex legal regulations into clear, practical guidance, helping entrepreneurs stay compliant and build sustainable businesses with confidence.

February 1, 2026