Corporate Laws (Amendment) Bill, 2026

Why in News?

After moving the Corporate Laws (Amendment) Bill, 2026 in the Lok Sabha recently, Finance Minister proposed to send the Bill to a 31-member Joint Parliamentary Committee (JPC) to enable further scrutiny.

• The Corporate Laws (Amendment) Bill, 2026, seeks to amend the Limited Liability Partnership Act, 2008 and the Companies Act, 2013.
• Aim - To streamline regulatory processes for companies, and decriminalize minor offences by shifting from criminal penalties to monetary fines.
• The proposal modifies the norms for convening hybrid annual or extraordinary general meetings, while also strengthening the frameworks for unpaid dividends and investor protection.
• It also proposes
  • The introduction of a framework for conversion of specified trusts (registered under SEBI / IFSC authority) into Limited Liability Partnerships (LLPs) and
  • An increase of profitability threshold for applicability of corporate social responsibility (CSR).

Key provisions

• Corporate Social Responsibility Changes - It increases the eligibility threshold for Corporate Social Responsibility to be hiked to Rs 10 crore profit from the current one of Rs 5 crore.
• At the moment, companies are required to spend 2% of the average profit from the last 3 years on CSR initiatives.
• Small Company Definition - The definition is redefined/expanded to reduce compliance burdens, including relaxed auditor appointment norms.
• Relaxation to small Companies - It also proposes to provide relaxation to small companies by providing exemption from CSR provisions, requirements related to auditor appointment, and reduction in additional fees.
• Increase in Time Period - The Bill also seeks to increase the time period for transfer of unspent CSR amounts relating to ongoing projects to the unspent corporate social responsibility account with the scheduled bank to 90 days from the current 30 day-period.
• Digital Governance - Increased acceptance of virtual/hybrid AGMs and EGMs is encouraged, though at least one physical AGM is mandatory every three years, as outlined by TaxGuru.
• Holding Meetings -Enabling companies to hold Annual General Meetings and Extraordinary General Meetings through video conferencing or other audio-visual means.
• With the requirement of holding at least one Annual General Meeting in physical mode at least once in 3 years.
• Self-declarations - Certain affidavits required under the Act can be replaced with self-declarations.

Reference

The Indian Express | Corporate Laws (Amendment) Bill