Finance Minister Nirmala Sitharaman introduced the Corporate Laws (Amendment) Bill, 2026, in the Lok Sabha on Monday. The bill, referred to a joint committee, seeks to amend the Companies Act 2013 and the Limited Liability Partnership Act 2008.
It aims to simplify compliance requirements and reduce the use of criminal provisions for certain corporate lapses.
Here are key provisions from the bill aimed to overhaul Companies Act.
Physical Annual General Meeting (AGM)
The bill has proposed to raise the limit to conduct a physical AGM from annually, as per the Companies Act, 2013, to once every three years.
Small Company Limit
According to the current provision, a company with a turnover of up to Rs 10 crore is termed a small company, ensuring limited compliance. The bill has raised this limit to Rs 20 crore, thereby increasing the compliance threshold. Similarly, turnover for a small company has been raised from Rs 100 crore to Rs 200 crore, aimed to cover wider regulatory exemptions.
CSR Regulation
The proposed bill has increased the profit limit for corporate social responsibility initiatives. According to the Companies Act, currently, companies with profits of Rs 5 crore or more must spend 2% of the average profit from the last three years on CSR initiatives. This limit has been hiked to Rs 10 crore, bringing fewer companies under the CSR mandate.
Decriminalised Fundraising
Under the Companies Act, fundraising offences can result in several penalties, including imprisonment for up to 10 years. As per the proposed bill, prospectus offences will now incur a Rs 2 lakh penalty.
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Other Provisions
The bill also includes provisions such as allowing digital shareholder participation, easing global investor access by permitting share capital in foreign currency at the IFSC. Additionally, expands the powers of the National Financial Reporting Authority (NFRA), tightening audit enforcement, while it strengthens the director identification framework.
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