The government introduced the Corporate Laws (Amendment) Bill, 2026 — proposing changes to the Limited Liability Partnership (LLP) Act, 2008 and the Companies Act to improve ease of doing business—was introduced in Parliament on Monday.
Though the Union Cabinet has already cleared the Bill, it has been referred to a Joint Parliamentary Committee (JPC), comprising members from both Houses, for detailed examination and recommendations. The changes are expected to be implemented in phases.
“The Corporate Laws (Amendment) Bill, 2026 has now come here after two years of extensive deliberations. The recommendations of the Company Law Committee (CLC) have been fully taken on board. The CLC included representatives from industry chambers, professional institutes, and legal and accounting experts. The report was also placed in the public domain for comments, which were examined,” Finance Minister Nirmala Sitharaman said while introducing the bill.
The proposed amendments aim to recalibrate penalty provisions, replacing criminal consequences for several minor procedural lapses with monetary penalties, and simplifying regulatory processes to create a more business-friendly environment.
A key focus area is aligning the LLP framework with the regulatory ecosystem of International Financial Services Centres (IFSCs). The Bill introduces new concepts such as “Specified IFSC LLPs” and allows such entities to maintain accounts and partner contributions in foreign currency. It also proposes permitting the conversion of certain trusts registered with market regulators into LLPs, with automatic transfer of assets and liabilities.
For companies, the amendments seek to simplify merger processes and voluntary strike-offs. The definition of a “small company” is proposed to be expanded, along with relaxations in CSR compliance and audit requirements.
“Overall, these amendments aim to further decriminalise offences, enhance ease of doing business, strengthen governance through an expanded role for Regional Directors (RDs) and the National Financial Reporting Authority (NFRA), and align India’s corporate framework with global best practices,” said Anjali Malhotra, Partner—Regulatory at Nangia Global.
However, the Bill has faced opposition criticism, particularly over proposed changes to corporate social responsibility (CSR) norms. Critics argue that the amendments could dilute provisions mandating companies to spend 2% of their profits on CSR activities.
The proposed changes include revising eligibility thresholds, extending timelines for transferring unspent CSR funds to designated accounts for ongoing projects, and modifying requirements related to the constitution of CSR committees.