Brief Overview:
The Corporate Laws (Amendment) Bill, 2026 has been introduced in the Lok Sabha (“Bill”). The Bill proposes amendments to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008 with a focus on changes that recognises present day realities to streamline the processes.
Technical Details:
Key proposal for changes to Companies Act, 2013:
1) Increase in threshold for small companies with paid-up capital limit being enhanced from ₹10 crore to ₹20 crore and the turnover limit being enhanced from ₹100 to ₹200 crore.
2) Small companies may have 1 board meeting in a calendar year instead of each half year.
3) Strengthening of digital compliance, with electronic service of documents for specified companies and formal recognition of virtual and hybrid meetings.
4) Greater flexibility in capital structuring, including up to two buy‑back offers in a year (subject to conditions).
5) Compliance with the requirements of Corporate Social Responsibility (“CSR”) to be applicable to entities with net profit of INR 10 crores instead of existing threshold of INR 5 crores. Simplified CSR compliance for smaller spends through board-level oversight.
6) Timeline for registration of charges for prescribed companies to be increased from 120 days to 180 day.
7) Annual general meetings and extra ordinary general permitted to be conducted via video conferencing or audio-visual means. However, companies must conduct a physical annual general meeting at least once every three years.
8) Prescribed classes of companies may be exempted from appointing auditors.
9) Increased corporate governance changes have been proposed including board reports to now include the committee’s composition and specific reasons if the Board rejects any committee recommendation.
10) Companies set up and incorporated in IFSC to be allowed to convert, issue and maintain capital in permitted foreign currency.
11) The Bill also sets out modifications in relation to (a) the criteria for independent directors, (b) provisions for alternate directors; (c) disqualification of directors, etc.
Key proposal for changes to the Limited Liability Partnership Act, 2008:
1) For LLPs a separate statutory category of IFSC LLPs has been proposed. The partner contribution for such LLP shall be mandatory to be in permitted foreign currency for IFSC LLPs.
2) Specified trusts have been permitted to convert to LLPs.
3) Several procedural non-compliances are being moved away from criminal consequences and handled through civil penalties. It also permits the LLP or its partner for suo moto adjudication of penalty for quicker closure of defaults.
The changes signal a move towards increased digitalisation, structured penalty regime, globally aligned environment for IFSC-based entities, and facilitation of entity transitions. These amendments also propose to facilitate smoother transitions and restructuring such as conversion of trust to LLP, which will provide support in corporate structuring and life cycle management of modern businesses with reduced friction.
For further details, please see:
Corporate Laws (Amendment) Bill, 2026
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