A parliamentary panel heard Finance Ministry and NFRA officials on the Corporate Laws (Amendment) Bill, 2026. The bill, introduced in March, aims to decriminalise minor defaults and amend the Companies Act and LLP Act to improve ease of doing business.
The Joint Committee of Parliament examining the Corporate Laws (Amendment) Bill, 2026, heard views of Finance Ministry officials and the National Financial Reporting Authority on Wednesday as it gathers stakeholder views for proposed changes to the legislation.
Panel Examines Bill for Ease of Doing Business
The Bill seeks to amend the Limited Liability Partnership Act, 2008 and the Companies Act to facilitate ease of doing business, decriminalise minor procedural defaults and modernise India's corporate governance architecture.
The Joint Committee, headed by BJP MP Sudheer Gupta, is examining the Bill introduced by Finance and Corporate Affairs Minister Nirmala Sitharaman in the Lok Sabha on March 23. On Wednesday, NFRA Chairperson Nitin Gupta presented his views to the committee with Full Time Member Smita Jhingran and other officials also present. Finance ministry officials also presented their views to the panel.
Focus on Decriminalisation and Reducing Litigation
The proposed amendments aim to rationalise penalties and shift several minor procedural lapses from criminal liability to monetary penalties. NFRA is under the administrative control of the Corporate Affairs Ministry.
The reforms are also aimed at streamlining regulatory processes to reduce litigation and create a more facilitative environment for companies and LLPs. The Bill proposes changes to modernise the country's corporate governance framework while reducing compliance burden. By moving minor procedural defaults out of the criminal ambit, the amendments are expected to lower litigation risk for businesses and LLPs.
The committee is examining how these changes balance ease of doing business with accountability and investor protection.
Path Forward and Government's Stance
The Corporate Laws (Amendment) Bill, 2026 was referred to the joint committee after its introduction in March. The panel is expected to submit its report after completing consultations with regulators, industry bodies and experts.
The amendments passed by Parliament would apply to companies governed under the Companies Act and LLPs registered under the 2008 Act, aligning penalty structures and compliance requirements with current business practices. The government has positioned the Bill as part of broader reforms to simplify corporate compliance and encourage formalisation. (ANI)
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