The Joint Committee on the Corporate Laws Amendment Bill, 2026, is seeking stakeholder feedback. The bill aims to amend the Companies Act and LLP Act, focusing on decriminalising offences, easing compliance, and expanding corporate flexibility.
The Joint Committee on the Corporate Laws Amendment Bill, 2026, headed by Sudheer Gupta, Member of Parliament, Lok Sabha, has invited views and suggestions from experts, industry associations, organisations, and other stakeholders. Interested parties can send two copies of memoranda or suggestions in English or Hindi to the Director (JCL), Lok Sabha Secretariat.
The Corporate Laws (Amendment) Bill, 2026, was introduced in the Lok Sabha on March 23, 2026, by the Ministry of Corporate Affairs. It seeks to amend the Companies Act, 2013 and the Limited Liability Partnership Act, 2008, with a focus on decriminalisation, easier compliance and expanding corporate flexibility.
Key Amendments Proposed in the Bill
Decriminalisation of Offences
A key change is the decriminalisation of several offences. The Bill replaces imprisonment or fine with civil penalties for violations such as wilful failure to furnish information related to producer companies, contravention of rules, failure to furnish documents required by the Registrar, violation of books of account requirements, and failure to comply with a Registrar's requisition other than a summons.
Changes to Corporate Social Responsibility (CSR)
On Corporate Social Responsibility, the Bill raises the net profit threshold for mandatory CSR from Rs 5 crore to Rs 10 crore or such other sum as prescribed. Companies meeting prescribed conditions will also be exempt from CSR provisions.
Simplifying Compliance Norms
Compliance norms are being simplified. Companies can serve documents electronically. Annual general meetings can be held physically or through video/audio-visual means, but at least one physical meeting must be held every three years. Firms meeting prescribed conditions will be exempt from appointing an auditor. Certain affidavits will be replaced with self-declarations.
Revised Definition of 'Small Companies'
The definition of "small companies" is expanded. Paid-up share capital limit rises from Rs 10 crore to Rs 20 crore, and turnover limit from Rs 100 crore to Rs 200 crore, easing compliance for more firms.
Adjustments to Merger and Acquisition Rules
For mergers, the approval threshold changes. Instead of 90 per cent of total shareholders, approval will need a majority of members present and voting holding at least 75 per cent of shares. Creditor approval threshold also drops from 90 per cent to 75 per cent.
Other Key Amendments
Other amendments include allowing buy-back up to a prescribed percentage for certain classes of companies, designating IBBI as the Valuation Authority to register valuers and set standards, and expanding NFRA's powers to issue advisories, censure or warnings. The Bill also recognises employee compensation schemes beyond stock options, like Restricted Stock Units and Stock Appreciation Rights.
Provisions for Limited Liability Partnerships (LLPs)
For LLPs, specified trusts registered with SEBI or IFSC Authority and engaged in prescribed activities can convert into LLPs.
(ANI)
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