{"id":23,"date":"2026-03-29T08:23:48","date_gmt":"2026-03-29T08:23:48","guid":{"rendered":"https:\/\/lexemer.com\/articles\/?p=23"},"modified":"2026-04-19T07:42:37","modified_gmt":"2026-04-19T07:42:37","slug":"the-corporate-laws-amendment-bill-2026-a-paradigm-shift-towards-ease-of-doing-business","status":"publish","type":"post","link":"https:\/\/www.lexemer.com\/articles\/the-corporate-laws-amendment-bill-2026-a-paradigm-shift-towards-ease-of-doing-business\/","title":{"rendered":"The Corporate Laws (Amendment) Bill, 2026: See Key Changes Proposed"},"content":{"rendered":"\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7] wp-block-paragraph\">The Companies (Amendment) Bill, 2026 proposes a wide set of changes to the Companies Act, 2013 and the LLP Act. The objective is to further the ease of doing business agenda, reduce compliance burdens, and align corporate law with current business practices.<\/p>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Here is a detailed look at the major changes proposed by the Bill.<\/p>\r\n<h2 class=\"text-text-100 mt-3 -mb-1 text-[1.125rem] font-bold\">Revised Definition of Small Companies<\/h2>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">The Bill significantly expands the scope of &#8220;small company&#8221; u\/s 2(85) of the Companies Act, 2013.<\/p>\r\n<ul class=\"[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3\">\r\n<li class=\"whitespace-normal break-words pl-2\">Paid-up share capital limit: increased to \u20b920 crore (earlier \u20b910 crore)<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">Turnover limit: increased to \u20b9200 crore (earlier \u20b9100 crore)<\/li>\r\n<\/ul>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">This will bring a larger set of private companies within the small company definition and reduce their compliance burden.<\/p>\r\n<h2 class=\"text-text-100 mt-3 -mb-1 text-[1.125rem] font-bold\">Corporate Social Responsibility (CSR)<\/h2>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Several relaxations have been introduced in the CSR framework:<\/p>\r\n<ul class=\"[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3\">\r\n<li class=\"whitespace-normal break-words pl-2\">The net profit threshold for mandatorily constituting a CSR Committee is increased to \u20b910 crore.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">The time limit for transferring unspent CSR amounts related to ongoing projects is extended from 30 days to 90 days.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">Companies with CSR obligations not exceeding \u20b91 crore are not required to constitute a CSR Committee.<\/li>\r\n<\/ul>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Note that the CSR spending obligation itself is not removed. Only the procedural requirement of constituting a committee is eased for smaller obligations.<\/p>\r\n<h2 class=\"text-text-100 mt-3 -mb-1 text-[1.125rem] font-bold\">Virtual and Hybrid Meetings<\/h2>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">The Bill formally allows companies to conduct AGMs and EGMs through video conferencing or other audio\/visual means, either wholly or partly.<\/p>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Key points:<\/p>\r\n<ul class=\"[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3\">\r\n<li class=\"whitespace-normal break-words pl-2\">If members requisition a meeting in hybrid mode, the company is bound to comply.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">Every company must hold at least one AGM in physical mode once every three years.<\/li>\r\n<\/ul>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">The second point preserves some element of physical shareholder engagement.<\/p>\r\n<h2 class=\"text-text-100 mt-3 -mb-1 text-[1.125rem] font-bold\">Mergers and Amalgamations<\/h2>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">The Bill simplifies the restructuring process:<\/p>\r\n<ul class=\"[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3\">\r\n<li class=\"whitespace-normal break-words pl-2\">For fast-track mergers, approval is required from a majority of members present and voting, holding at least 75% of the value of shares.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">Applications for compromises, arrangements, or amalgamations are to be made before the Tribunal having jurisdiction over the transferee or resultant company.<\/li>\r\n<\/ul>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">The second change streamlines jurisdictional requirements where the transferor and transferee are in different jurisdictions.<\/p>\r\n<h2 class=\"text-text-100 mt-3 -mb-1 text-[1.125rem] font-bold\">Executive Compensation<\/h2>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">The scope of employee compensation instruments has been widened. Companies may now issue instruments under any &#8220;scheme linked to the value of the share capital of a company.&#8221;<\/p>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">This moves beyond traditional ESOPs and formally brings modern compensation structures such as:<\/p>\r\n<ul class=\"[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3\">\r\n<li class=\"whitespace-normal break-words pl-2\">Restricted Stock Units (RSUs)<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">Stock Appreciation Rights (SARs)<\/li>\r\n<\/ul>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">within the ambit of the Act.<\/p>\r\n<h2 class=\"text-text-100 mt-3 -mb-1 text-[1.125rem] font-bold\">International Financial Services Centres (IFSC)<\/h2>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">To improve operational flexibility in IFSCs:<\/p>\r\n<ul class=\"[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3\">\r\n<li class=\"whitespace-normal break-words pl-2\">Companies and LLPs must issue and maintain share capital or partner contributions in a permitted foreign currency.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">Financial statements and books of account are also to be maintained in such currency.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">An IFSC LLP must include the suffix &#8220;International Financial Services Centre LLP&#8221; in its name.<\/li>\r\n<\/ul>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Note that this aligns IFSC entities closer to international practice and removes the rupee-denomination constraint.<\/p>\r\n<h2 class=\"text-text-100 mt-3 -mb-1 text-[1.125rem] font-bold\">Strengthening of Regulatory Authorities<\/h2>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\"><strong>National Financial Reporting Authority (NFRA)<\/strong><\/p>\r\n<ul class=\"[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3\">\r\n<li class=\"whitespace-normal break-words pl-2\">NFRA is constituted as a body corporate with a dedicated NFRA Fund.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">NFRA is empowered to issue advisories, censures, and warnings.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">NFRA may mandate additional professional training for auditors.<\/li>\r\n<\/ul>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\"><strong>Insolvency and Bankruptcy Board of India (IBBI)<\/strong><\/p>\r\n<ul class=\"[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3\">\r\n<li class=\"whitespace-normal break-words pl-2\">IBBI is designated as the Valuation Authority.<\/li>\r\n<li class=\"whitespace-normal break-words pl-2\">It will regulate valuers, prescribe valuation standards, and monitor compliance.<\/li>\r\n<\/ul>\r\n<h2 class=\"text-text-100 mt-3 -mb-1 text-[1.125rem] font-bold\">Decriminalisation of Offences<\/h2>\r\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">In line with the ease of doing business agenda, the Bill decriminalises various procedural defaults under the Companies Act and the LLP Act. Criminal penalties, including imprisonment, are being replaced with civil monetary penalties.<\/p>\r\n\r\n\r\n\r\n\r\n<hr \/>\r\n\r\n\r\n<p class=\"has-accent-4-color has-text-color has-link-color has-small-font-size wp-elements-88429e4a3ecd45a2490b27aaba6ea634 wp-block-paragraph\" style=\"border-width: 0.5px; border-top-left-radius: 5px; border-top-right-radius: 5px; border-bottom-left-radius: 5px; border-bottom-right-radius: 5px;\"><em>This article summarizes proposed reforms under a draft Corporate Laws (Amendment) Bill, 2026, based on policy discussions and committee recommendations. These provisions are not yet enacted law.<\/em><\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>The Companies (Amendment) Bill, 2026 proposes a wide set of changes to the Companies Act, 2013 and the LLP Act. The objective is to further the ease of doing business agenda, reduce compliance burdens, and align corporate law with current business practices. Here is a detailed look at the major changes proposed by the Bill. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":24,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-23","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-companies-act-2013"],"_links":{"self":[{"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/posts\/23","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/comments?post=23"}],"version-history":[{"count":5,"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/posts\/23\/revisions"}],"predecessor-version":[{"id":133,"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/posts\/23\/revisions\/133"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/media\/24"}],"wp:attachment":[{"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/media?parent=23"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/categories?post=23"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lexemer.com\/articles\/wp-json\/wp\/v2\/tags?post=23"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}