The introduction of the Corporate Laws (Amendment) Bill, 2026[1], in the Lok Sabha on March 23, 2026, is a significant development in India’s corporate regulatory landscape. This landmark legislation aims to transform the country’s business environment by enhancing ease of doing business, simplifying compliance requirements, and strengthening the regulatory framework governing companies and limited liability partnerships (“LLPs”).

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Aims and Objectives:

The Bill’s primary objectives are to:

  1. Enhance Ease of Doing Business: Streamline regulatory processes, reduce bureaucratic hurdles, and promote a business-friendly environment.
  2. Simplify Compliance Requirements: Rationalize and simplify compliance procedures, reducing the administrative burden on companies and LLPs.
  3. Strengthen Regulatory Framework: Reinforce the regulatory framework governing companies and LLPs, ensuring greater accountability, transparency, and good governance.

Key Amendments:

  1. Decriminalization of Offences: The Bill decriminalizes several offences under the Companies Act, 2013, and the Limited Liability Partnership Act, 2008, imposing civil penalties instead of imprisonment or fines. This move is expected to reduce the burden on the judicial system and promote a culture of compliance.
  2. Small Company Thresholds: The Bill doubles the thresholds for small companies, increasing the paid-up capital limit from ₹10 crore to ₹20 crore and the turnover limit from ₹100 crore to ₹200 crore. This expansion is expected to benefit more companies, particularly small and medium-sized enterprises (“SMEs”).
  3. Corporate Social Responsibility (CSR): The Bill revises the CSR threshold, increasing the net profit threshold from ₹5 crore to ₹10 crore. Companies meeting the prescribed conditions will no longer be required to comply with CSR provisions.
  4. Board and General Meetings: The Bill codifies flexibility in conducting board and general meetings through physical, virtual, and hybrid modes, and relaxes notice requirements.
  5. Directors and Key Managerial Personnel (“KMP”): The Bill expands disqualification criteria, introduces a “fit and proper person” requirement, and mandates an active Director Identification Number (“DIN”) throughout tenure.

For LLPs: 

  1. IFSC/GIFT City Framework: The Bill introduces a framework for Specified IFSC LLPs, allowing LLPs set up in International Financial Services Centres (“IFSCs”) to operate with greater flexibility.
  2. National Financial Reporting Authority (“NFRA”): The Bill restructures NFRA into a quasi-judicial regulator, granting it corporate status, independent rule-making power, and fee-levying authority.

Implications:

The proposed amendments are expected to have far-reaching implications for companies, LLPs, and other stakeholders.

  1. Reduced Compliance Burden: The decriminalization of offences and relaxation of compliance requirements will reduce the administrative burden on companies, allowing them to focus on business growth and development.
  2. Increased Flexibility: The Bill provides greater flexibility in conducting board and general meetings, enabling companies to adopt more efficient and effective governance practices.
  3. Improved Governance: The expanded disqualification criteria and “fit and proper person” requirement will promote better governance and accountability among directors and KMPs.
  4. Enhanced Regulatory Framework: The restructured NFRA will strengthen the regulatory framework governing auditors and accountants, ensuring higher standards of professionalism and ethics.
  5. Boost to SMEs: The revised small company thresholds will provide relief to SMEs, enabling them to access more benefits and exemptions.
  6. New Opportunities for IFSCs: The framework for Specified IFSC LLPs will create new opportunities for businesses operating in IFSCs, enhancing India’s competitiveness as a global financial hub.
  7. Impact on CSR: The revised CSR threshold will provide relief to companies with lower net profits, but may also lead to reduced CSR spending in certain sectors.

Author: Navya Saxena, Associate
Co- Author: Devansh khasparya, Intern

  1. https://prsindia.org/files/bills_acts/bills_parliament/2026/Corporate_Laws_(A)_Bill_2026_Text.pdf