CORPORATE AMENDMENT BILL, 2026
The Amendment Bill was introduced in the Lok Sabha on 23 March 2026 AND currently under review by a 31-member Joint Parliamentary Committee (JPC), for detailed examination. After detail examination submit its recommendation and report to parliament. After the JPC report is submitted, the Bill will be discussed again in Parliament and changes may be made based on the Committee’s suggestions either at once or gradually.
“The Corporate Laws (Amendment) Bill, 2026 (Bill) brings changes to company laws to reduce difficulties for businesses and ensure better governance.”
“The changes move focus from too much paperwork to actual results, with rules based on the level of risk.”
OBJECTIVE AND REASON BEHIND AMENDMENT
- Making corporate structure flexible and funding process smooth.
- Promoting of digital governance and modernization.
- Alignment with global best practices.
- Making corporate compliances simpler.
- Makes CSR implementation practical.
- Ease in doing Business for small entities.
MEASURES FOR EASE OF DOING BUSINESS:
SECTION 2(85) – SMALL COMPANY
Upper limit of paid-up capital increased from INR10 crore to INR20 crore AND Upper limit of turnover increased from INR100 crore to INR200 crore.
SECTION (20) – SERVICE OF DOCUMENT
Sending documents to members only through electronic mode (like email) will be treated as proper compliance for certain class of companies. However, if a member wants the documents in another format, they can request it by paying the required fee.”
SECTION (42) – PRIVATE PLACEMENT
Earlier it was limited to shares, but now it covers all type of securities not just shares.
SECTION (62) – RIGHT ISSUE
Earlier, rules for share-linked schemes were not clear. Now formal recognition of Restricted Stock Units (RSUs) and Stock Appreciation Rights (SARs) have been properly defined and simplified especially for employee benefit.
SECTION (68) – BUY- BACK
Earlier, one buy-back is only allowed in a financial year but now it increase up to 2 times in a financial year but must be with a gap of 6 months between them.
Removal of the requirement to verify declaration of solvency by affidavit.
SECTION (77) – DUTY TO REGISTER CHARGES
The time limit for registering a charge has been increased from 120 days to 180 days for certain companies, after payment of such ad valorem fees as may be prescribed.
SECTION (96) – ANNUAL GENERAL MEETING (AGM)
AGMs and EGMs permitted via video conferencing or audio-visual means. However, companies must conduct a physical annual general meeting at least once every three years.
SECTION (101) – NOTICE OF MEETINGS
Fully virtual EGMs, notice period to be reduced from 21 clear days to 7 days or such period and manner to be prescribed by the rules.
SECTION (132) – NFRA
Earlier NFRA
have limited power now getting strong enforcement power.
Section (135) – CSR
Ealier it was applicable when net profit is INR5 crore “Now CSR will apply only if net profit is INR10 crore or more. Also company get 30days time to transfer unspent CSR amount for ongoing projects now it will change to 90 days from the end of the relevant financial year.
CSR Committee not required to be constituted, up to higher spend threshold, changed from INR50 lakh to INR1 crore (or higher as prescribed).
Provision introduced for prescribed classes of companies to be exempt from CSR, subject to conditions.
SECTION (139) – STATUTORY AUDITOR
Earlier it was strictly mandatory now certain relaxations and prescribed classes of companies may be exempted from appointing auditors.
SECTION (173(5)) – BOARD MEETING
Small company, one person company and Dormant companies require only one meeting as per calendar year.
SECTION (184) – DISCLOSURE OF INTEREST
Submission of MBP-1 is now required only when there is a change in disclosures, instead of being mandatory at the first Board meeting of every financial year.”
SECTION (186) – INVESTMENT LOANS
Earlier, there were strict limits and approval requirements for giving loans and making investments. Now, certain companies will get relaxation or exemptions from these rules.”
Director Amendments (Appointment/Qualification/Vacation/DIN):
| SECTION | PARTICULAR | OLD | AMENDED | |
| Sec. 134 | Enhanced Audit Committee Transparency | Limited Disclosures | Enhanced Disclosures in Board Report | |
| Sec. 152 | DIN Validity | Lifetime validity | Periodic validation / renewal introduced | |
| Sec. 134 | Explanation on Auditor Remarks | General Reporting | Detailed explanation on qualifications required | |
| Sec. 149 | Independence in Group Entities | Basic independence norms | Stricter independence norms across group companies | |
| Sec. 141, 148 & 204 | Standardized Auditor Qualifications | Different standards | Standardized qualification criteria | |
| [Sec. 144] | Restrictions on Non-Audit Services | Certain restrictions | Expanded restrictions for auditor independence | |
| [Sec. 149] | Independence in Group Entities | Cooling-off restrictions for Independent Directors (IDs) now explicitly extend to the holding, subsidiary, or associate companies. | ||
| [Sec. 164] | Related Party Default Disqualification | Limited disqualification | Disqualification extended to related party defaults | |
| [Sec. 164] | Director Fit and Proper Mandate | Not defined clearly | Fit & proper criteria introduced | |
| [Sec. 203A] | Resignation of Non-Director KMPs | Not defined | Formal process for non-director KMP resignation | |
| [Sec. 154] | DIN Verification | Basic verification | Enhanced KYC & verification | |
| [Sec. 161] | Casual Vacancy | Limited clarity | Clear procedure defined | |
| [Sec. 161] | Additional Directors | Existing provision | Rationalized appointment provisions | |
| [Sec. 164(2)] | Disqualification | Existing | Strengthened provisions | |
| [Sec. 167] | Immediate Vacation | Conditional | Immediate vacation in specified cases | |
OTHER AMENDMENTS
SECTION (4) – NAME RESERVATION
Furnishing incorrect information for reservation of a company name a fixed penalty of ₹50,000. Replaces the previous fine, which could extend up to ₹1,00,000.
SECTION (26) – PROSPECTUS
Contravention of provisions relating to matters to be stated in a prospectus or registration a fixed penalty of ₹2 lakh for the contravention. The Bill seeks to decriminalize this, replacing potential imprisonment for officers.
SECTION (40) – SHARE VARIATION
Failure to comply with the listing requirements and allotment of securities (Sec. 40)
- Company: Penalty of ₹25 lakh.
- Officers in Default: Penalty of ₹2 lakh
SECTION (128) – Books of Accounts
Failure to maintain proper books of accounts
- Listed Companies: Penalty of ₹5 lakh.
- Other Companies: Penalty of ₹50,000.
The amendment shifts the penalty to a flat rate based on company type, decriminalizing potential imprisonment.
SECTION (147) – Audit Sections
Contravention of sections 139 (Appointment), 140 (Removal/Resignation), 141 (Eligibility), 142 (Remuneration), and 146 (Auditor attendance)
- Company: Penalty capped at ₹5 lakh.
- Officers/Auditors: Penalty capped at ₹1 lakh.
| SECTION | PARTICULAR | OLD | AMENDED |
| Sec. 4 | Name Reservation | Basic Rules | Stricter and time bound reservation |
| [Sec. 26] | Prospectus | Detailed compliance | Simplified+ fixed penalty approach |
| [Sec. 40] | Share Variation | Limited clarity | Improved clarity and investor protection |
| [Sec. 128] | Accounts | Physical+ digital | Digital record-keeping emphasized |
| [Sec. 147] | Audit Sections | Criminal liability | Monetary penalty focus |
| Sec. 12A | Mandatory Digital Infrastructure | Not Applicable | Website, email, digital presence mandatory for prescribed companies |
| (Section 185) | LLP Inclusion | Company-focused | LLPs also included |
CONCLUSION
It reflects a clear reduction from a compliance-heavy regime to a business-friendly and digitally enabled environment. Explanation regarding director amendment is mentioned in next blog.
