Quick Links
Connect us
Directors Databank (Empannel Yourself)
Become a faculty
Blog
Become an Awards Assessor
Publications
Contact Us
Latest from the Regulator - March 2026
Corporate Laws (Amendment) Bill, 2026
The Corporate Laws (Amendment) Bill, 2026 proposes wide-ranging changes to both the Limited Liability Partnership Act, 2008 and the Companies Act, 2013, marking one of the most comprehensive overhauls since the enactment of the 2013 law. The reforms are anchored in the twin objectives of enhancing ease of doing business while reinforcing governance standards.
Drawing on the recommendations of the 2022 Company Law Committee and the High-Level Committee on Non- Financial Regulatory Reforms, the Bill introduces amendments across 88 sections of the Companies Act, 2013. These changes span across critical areas including corporate governance, regulatory simplification, and decriminalisation, reflecting a clear shift from punitive frameworks towards a more facilitative and proportionate compliance regime.
It stated the following objectives:
• Decriminalise procedural defaults by replacing criminal fines with civil penalties
• Ease of compliance for OPCs, small companies, startups & producer companies
• Streamline regulatory practices for operational efficiency
• Recognise new concepts reflecting evolving business practices
• Carry out drafting & clarificatory changes to remove ambiguities
Key Highlights & Proposed Amendments:
1. Strengthening Director accountability and eligibility:
Some of the proposed amendments:
• Independence criteria for IDs - To be assessed for the preceding three FYs and also the current FY. Additionally, ongoing compliance with independence conditions is required throughout the ID's term.
• For determining eligibility as an ID, the threshold relating to transactions of legal / consulting firms connected to IDs with the company, revised from a fixed “10% or more” of gross turnover of the firm trigger to “10% or such lower percent as may be prescribed” of the gross turnover of the firm.
• Cooling-off/post-tenure restrictions for IDs expanded to cover holding, subsidiary and associate companies.• Additional Director's tenure changed from “till next AGM” to the earlier of (i) next general meeting or (ii) three months from appointment. Similar timeline for Casual Vacancy (non-retiring director).
• Restriction on Board power to appoint rejected Directors: A person whose appointment as director could not be considered / approved in a general meeting cannot be appointed by the Board as Additional Director / Alternate Director / Casual vacancy director without prior Shareholders' approval.
• DIN framework strengthened through verification, deactivation/cancellation, surrender and restoration mechanisms.
• Expanded and sharpened director's eligibility / disqualification architecture, including:
- Disqualification if a person has been an Auditor / Secretarial Auditor / Cost Auditor / Registered Valuer / Insolvency Professional of the company/group in the recent period.
- Introduction of “fit and proper” assessment criteria to be prescribed
- Better clarity on disqualification periods and consequences (vacation of office)
2. CSR Rationalization:
Some of the proposed amendments:
• CSR applicability threshold linked to net profit proposed to rise from INR 5 crore to INR 10 crore (or as may be prescribed).
• Timeline to transfer unspent CSR amounts for ongoing projects to the Unspent CSR Account extended from 30 days to 90 days from the end of the relevant financial year.
• CSR Committee not required to be constituted, up to higher spend threshold, i.e., changed from INR 50 lakh to INR 1 crore (or higher as prescribed).
• A new enabling provision introduced for prescribed classes of companies to be exempt from CSR, subject to conditions.
3. Digital corporate Law
Some proposed amendment:
• AGMs and EGMs permitted to be held physically / through VC or other audio-visual means / in hybrid mode (wholly or partly), subject to prescribed conditions.
• Member requisition rights for hybrid mode: Where members meeting the requisition threshold require a hybrid meeting, the company must hold the meeting in hybrid mode (AGM / EGM as applicable).
• Minimum physical AGM safeguard: Every company must hold its AGM in physical mode at least once every three years.
• VC-only EGMs may be convened with a minimum seven days' notice (or such other period as may be prescribed).
• Digital communication + electronic service: Prescribed classes of companies to maintain website / e-mail / other communication modes (and intimate changes to Registrar of Companies) and to serve documents only through electronic mode (deemed sufficient compliance), with an option for members to request a specific mode on payment.
4. Proportionate Enforcement and Decriminalisation
Some of the proposed amendments:
• Consequence for multiple defaults shifted from “fine/prosecution” to “civil penalty”, including for defaults w.r.t. name reservation, prospectus, meetings, books of accounts, furnishing information to RoC, compliance with rules under Companies Act, improper use of the words “limited” and “private limited”, etc.
• Penalty adjudication is expanded and made more accessible, including:
- Suo moto applications by company / officers in default and LLPs / partners / designated partners for adjudication
- Assistant Registrars may also adjudicate penalties (in addition to Registrars)
- Additional Appellate authorities (apart from Regional Directors, and not below the rank of Joint Director) may be notified
• Introduction of a recovery framework for unpaid penalties (sale, bank attachment, etc.), broadly aligned with Income Tax recovery mechanisms.
• Introduction of a settlement framework for certain contraventions that are liable to penalties.
• Pre-deposit of 10% of the penalty amount before certain appeals are entertained (i.e., penalties imposed by NFRA, valuation authority or adjudicating officers).
• Threshold for compounding by Regional Directors increased from INR 25 lakh to INR 1 crore.
• Changes in consequences for fraud: Threshold for frauds leading to mandatory imprisonment increased from INR10 lakh to INR25 lakh, but fines for frauds lower than the prescribed limits increased to INR1 crore.
• Further reduction in penalties for one-person / small / start-up / producer company (penalties may be lower than 50% of the regular penalties).
• Mechanism introduced to appeal against the Registrar's decisions on incorporation and name reservation matters for LLPs.
5. Ease of Doing Business
Some proposed amendments:
• “Small company” qualifying conditions expanded materially
| CRITERIA | EXISTING | PROPOSED |
| Paid-up capital | INR 10 crore | INR 20 crore |
| Turnover | INR 100 crore | INR 200 crore |
• Lower caps on additional fees for delayed compliance for certain classes of companies:
- Per day cap for non-filing of financials and annual return may be lower than INR 100
- Overall additional fees capped at INR 2 lakh.
• Additional time for registration of charges for certain classes of companies (i.e., 120 days instead of 60 days) under the ad valorem fee route – total time period for registration will now be 180 days from the date of creation of charge (instead of 120 days)
• Board meeting requirements further eased for small / one-person / dormant companies (i.e., one meeting in a calendar year instead of every half year and no minimum gap between meetings)
• Director disclosures of interest in Form MBP-1 no longer required on an annual basis
• Realignment of FY to 31 March enabled for companies / body corporates that had changed their FY – this could be based on an application made by the company / body corporate or any other company/body corporate for commercial considerations.
• Provisions for conversion of “Specified trusts” into Limited Liability Partnerships (LLPs) introduced
To view the complete Corporate Laws (Amendment) Bill 2026, please visit: https://sansad.in/ls/legislation/bills
Additional link: https://prsindia.org/files/bills_acts/bills_parliament/2026/Corporate_Laws_(A)_Bill_2026_Text.pdf
Back to HomeAuthor
Institute of Directors India
Bringing a Silent Revolution through the Boardroom
Institute of Directors (IOD) is an apex national association of Corporate Directors under the India's 'Societies Registration Act XXI of 1860'. Currently it is associated with over 31,000 senior executives from Govt, PSU and Private organizations of India and abroad.
Owned by: Institute of Directors, India
Disclaimer: The opinions expressed in the articles/ stories are the personal opinions of the author. IOD/ Editor is not responsible for the accuracy, completeness, suitability, or validity of any information in those articles. The information, facts or opinions expressed in the articles/ speeches do not reflect the views of IOD/ Editor and IOD/ Editor does not assume any responsibility or liability for the same.
