Corporate Laws (Amendment) Bill, 2026: Background, Aim and Key Features

Context: The Union Cabinet has moved the Corporate Laws (Amendment) Bill, 2026, in the Lok Sabha, subsequently referring it to a 31-member Joint Parliamentary Committee (JPC) for detailed scrutiny.

Corporate Laws (Amendment) Bill, 2026: Background

• The Corporate Laws (Amendment) Bill, 2026, is a strategic legislative update designed to modernize the regulatory framework governing Indian businesses by amending the Companies Act, 2013, and the Limited Liability Partnership (LLP) Act, 2008.

Aim

• The primary objective is to foster a more business-friendly environment in India by reducing the compliance burden and fear of imprisonment for minor mistakes. It seeks to align corporate governance with the current economic landscape and the vision of a Viksit Bharat.

Key Features of Corporate Laws (Amendment) Bill, 2026

• Decriminalization of Offences: Shifts 21 minor/technical offences from a criminal court-based system to an electronic e-adjudication platform where only monetary penalties are levied, removing the risk of imprisonment.
• CSR Threshold Revision: Increases the net profit threshold for mandatory Corporate Social Responsibility (CSR) from ₹5 crore to ₹10 crore, exempting many small companies from the 2% spending requirement.
• Hybrid Meetings: Enables companies to hold Annual General Meetings (AGM) and Extraordinary General Meetings (EGM) via video conferencing, with a mandatory physical meeting required only once every three years.
• Extended Timelines: Increases the time allowed to transfer unspent CSR funds for ongoing projects to a designated bank account from 30 days to 90 days.
• Self-Declaration Framework: Replaces several traditional affidavits required under the Acts with simple self-declarations, reducing paperwork and notarization costs.
• LLP Conversion: Introduces a new framework allowing specified trusts (registered under SEBI or IFSC) to convert into Limited Liability Partnerships (LLPs).

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