A Joint Parliamentary Committee (JPC) has approved the Corporate Laws (Amendment) Bill with several recommendations aimed at reducing compliance burdens, decriminalising minor corporate law violations and strengthening India's ease of doing business framework. The panel, chaired by MP Sudheer Gupta, cleared the Bill with modifications, according to the JPC committee report.
One of the key recommendations is the further decriminalisation of corporate law violations, with minor procedural lapses proposed to attract only civil penalties instead of criminal prosecution. The committee has also recommended easing compliance requirements for startups, small companies and limited liability partnerships (LLPs), a move aimed at reducing regulatory costs and encouraging entrepreneurship.
The proposed amendments include relaxation of Corporate Social Responsibility (CSR) norms for smaller companies, providing relief to businesses with relatively limited resources. In another significant change, the committee has backed allowing specified trusts to convert into LLPs, providing greater flexibility in business structuring.
The Bill also proposes to permit companies operating in the International Financial Services Centre (IFSC) to maintain their capital in foreign currency, a measure expected to enhance the competitiveness of India's international financial hub. The legislation further supports a digital-first approach to corporate governance by encouraging greater digitisation of regulatory processes and corporate compliance.
Apart from recommending changes to the Bill, the committee has urged the government to expedite the rollout of the regulatory framework for IFSC entities to facilitate smoother implementation of the proposed reforms. The proposed amendments form part of the government's broader efforts to modernise India's corporate law regime, simplify compliance requirements and improve the country's business environment while maintaining regulatory oversight.
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