{"id":2578,"date":"2026-06-05T07:16:13","date_gmt":"2026-06-05T07:16:13","guid":{"rendered":"https:\/\/veritaslegal.in\/staging\/?p=2578"},"modified":"2026-06-05T07:16:13","modified_gmt":"2026-06-05T07:16:13","slug":"the-corporate-laws-amendment-bill-2026","status":"publish","type":"post","link":"https:\/\/veritaslegal.in\/staging\/the-corporate-laws-amendment-bill-2026\/","title":{"rendered":"The Corporate Laws (Amendment) Bill, 2026"},"content":{"rendered":"[vc_row][vc_column][vc_column_text]Introduced in the Lok Sabha on 23 March 2026 \u2022\u00a0 Referred to Joint Parliamentary Committee<\/em><\/p>\n

The Bill proposes wide-ranging amendments to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008, with a focus on ease of doing business, decriminalisation of procedural defaults, formal recognition of evolving corporate practices, and removal of legislative ambiguities. The key amendments are summarised below.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Amendment Area<\/strong><\/td>\nProposed Change at a Glance<\/strong><\/td>\n<\/tr>\n<\/thead>\n
Decriminalisation<\/strong><\/td>\nOne of the central themes of the Bill is decriminalisation of procedural defaults under the Act and the LLP Act, including compliance lapses in connection with: furnishing information \/ documents required by the Registrar; prescribed rules; and maintenance of books of accounts; etc<\/em>.<\/td>\n<\/tr>\n
Small Companies<\/strong><\/td>\nThe Bill proposes to raise the thresholds for qualification as a \u201csmall company\u201d, by a proposed increase in the paid-up share capital cap from INR 10 crore to INR 20 crore, and the turnover cap from INR 100 crore to INR 200 crore.<\/td>\n<\/tr>\n
Executive Compensation Instruments<\/strong><\/td>\nSections 42(2) and 62(1)(b) of the Act are proposed to be amended to include other equity-linked schemes, in addition to stock option schemes, resulting in RSUs and SARs, which were already widely used in practice, now being recognised as forms of executive compensation, with shareholder approval.<\/td>\n<\/tr>\n
Buy-Back<\/strong><\/td>\nThe Bill proposes various amendments to buy-back provisions, including permitting prescribed classes of companies to: (i) undertake buy-backs beyond the existing 25% cap on paid-up capital and free reserves, up to a prescribed percentage; and (ii) conduct up to two buy-back offers within a single financial year, with a time gap of at least six months.<\/p>\n

It also proposes that securities issued pursuant to other equity linked schemes under Section 62(1)(b), in addition to stock options and sweat equity, will be eligible for buy-back.<\/td>\n<\/tr>\n

Corporate Social Responsibility (CSR)<\/strong><\/td>\nThe Bill proposes relaxations to the CSR regime, including an increase in the net profit threshold for CSR applicability from INR 5 crores to INR 10 crores, relaxation in the timeline for transferring unspent CSR amounts to the Unspent CSR Account from 30 days to 90 days, and increase in the threshold for the requirement to constitute a CSR Committee from INR 50 lakhs to INR 1 crore.<\/td>\n<\/tr>\n
Directors<\/strong><\/td>\nThe Bill proposes several changes with respect to directors\u2019 eligibility, including:<\/p>\n

(i) eligibility criteria for independent directors must be met and maintained throughout such director\u2019s tenure (not only at the time of appointment), and extension of the cooling-off period restrictions for independent directors to holding, subsidiary, and associate companies;<\/p>\n

(ii) introduction of new grounds of disqualification for appointment as a director with respect to persons who have served as auditor, secretarial auditor, cost auditor, registered valuer, or insolvency professional of the company or its group during the preceding three financial years or the current year, or whom the board has not assessed as \u2018fit and proper\u2019 under prescribed criteria;<\/p>\n

(iii) the period triggering disqualification for non-filing of financial statements or annual returns is proposed to be reduced from three to two financial years;<\/p>\n

(iv) an additional director may hold office up to the date of the next general meeting or for three months from his appointment, whichever is earlier; and<\/p>\n

(v) the existing requirement for an annual disclosure of interests by directors is proposed to be relaxed, requiring disclosure only when there is a change in previously disclosed interests.<\/td>\n<\/tr>\n

General Meetings<\/strong><\/td>\nThe Bill provides for electronic service of certain documents to members by prescribed classes of companies. Companies will be permitted to hold general meetings physically, virtually, or in hybrid mode, subject to there being at least one physical annual general meeting in every three years. For wholly virtual EGMs, the minimum notice period is proposed to be reduced from 21 days to 7 days.<\/td>\n<\/tr>\n
Merger Schemes<\/strong><\/td>\nThe Bill proposes various changes to the merger regime under Sections 230 to 233 of the Act, including that:<\/p>\n

(i) applications shall be filed with a single NCLT bench having jurisdiction over the transferee or resultant company, as opposed to the existing regime where each company was required to approach the NCLT bench where its registered office was situated;<\/p>\n

(ii) for fast-track mergers under Section 233, the member and creditor approval thresholds are proposed to be aligned with those under Section 230 (i.e.<\/em>, revised from 90% to 75%).<\/p>\n

The Bill also clarifies that companies undergoing a liquidation process under IBC shall not be allowed to initiate compromises or arrangements under the Act.<\/td>\n<\/tr>\n

National Financial Reporting Authority (NFRA)<\/strong><\/td>\nThe Bill proposes to strengthen the NFRA by reconstituting it as a body corporate with independent regulation making powers and an expanded enforcement mandate, including the ability to issue advisories, censures, and warnings, initiate inquiries and impose penalties. It is proposed that failure to comply with NFRA orders may attract consequences including imprisonment and fines.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Note: <\/strong>RSUs = Restricted Stock Units; SARs = Stock Appreciation Rights; NFRA = National Financial Reporting Authority; NCLT = National Company Law Tribunal; IBC = Insolvency and Bankruptcy Code, 2016.[\/vc_column_text][\/vc_column][\/vc_row]\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_column_text]Introduced in the Lok Sabha on 23 March 2026 \u2022\u00a0 Referred to Joint Parliamentary Committee The Bill proposes wide-ranging amendments to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008, with a focus on ease of doing business, decriminalisation of procedural defaults, formal recognition of evolving corporate practices, and removal of legislative ambiguities.…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":["post-2578","post","type-post","status-publish","format-standard","hentry","category-insights","entry","no-media"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/posts\/2578","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/comments?post=2578"}],"version-history":[{"count":2,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/posts\/2578\/revisions"}],"predecessor-version":[{"id":2580,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/posts\/2578\/revisions\/2580"}],"wp:attachment":[{"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/media?parent=2578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/categories?post=2578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/veritaslegal.in\/staging\/wp-json\/wp\/v2\/tags?post=2578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}