Bill to Ease Corporate Compliance Norms Referred to Joint Parliamentary Committee

Corporate Laws (Amendment) Bill, 2026

Key Highlights

• The Finance Minister, Nirmala Sitharaman, introduced the Corporate Laws (Amendment) Bill, 2026, in the Lok Sabha on Monday to ease compliance norms and reduce criminal penalties.
• The bill proposes amendments to the Limited Liability Partnership Act, 2008, and the Companies Act, 2013, to address gaps identified by the Company Law Committee in 2022.
• The amendments aim to:
  • Rationalize penalties and shift minor procedural lapses from criminal liability to monetary penalties
  • Streamline regulatory processes to promote ease of doing business
  • Improve the overall corporate compliance framework while reducing litigation
  • Encourage a more facilitative regulatory environment for companies and limited liability partnerships (LLPs)

Key Provisions

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

• The bill seeks to:
  • Streamline regulatory practices to strengthen and recognize new concepts in light of the rapidly evolving corporate landscape
  • Allow companies and LLPs in International Financial Services Centres (IFSCs) to transact and maintain books in permitted foreign currencies
  • Introduce a framework for conversion of specified trusts into LLPs
  • Prescribe classes of companies that may be exempted from mandatory auditor appointments
  • Enhance powers of the National Financial Reporting Authority, including wider disciplinary mechanisms and more streamlined inquiry and penalty processes

Impact

• The amendments are expected to benefit:
  • One-person companies
  • Small companies
  • Startups
  • Producer companies
  • Investment vehicles and regulated pooling structures
• The bill aims to position India as a competitive global financial hub and promote ease of compliance for select entities.