Corporate Laws (Amendment) Bill, 2026: Key Changes
UPSC / SSC current affairs note · Economy
Why in news
The Corporate Laws (Amendment) Bill, 2026 was introduced in Lok Sabha on March 23, 2026, aiming to amend the Companies Act, 2013 and the LLP Act, 2008. It proposes significant changes in decriminalisation, CSR thresholds, merger approvals, and compliance simplification, impacting corporate governance and ease of doing business.
Background
The Companies Act, 2013 governs corporate entities in India, with periodic amendments to improve compliance and governance. The Bill is currently under consideration by a Joint Parliamentary Committee.
Key facts
Decriminalises offences like wilful failure to furnish information, contravention of Rules, failure to furnish documents to Registrar, violation of books of account requirements, and failure to comply with Registrar's requisition (other than summons).
CSR threshold for net profit changed from Rs 5 crore to Rs 10 crore or such other sum prescribed; companies fulfilling prescribed conditions may be exempt from CSR provisions.
Annual general meeting may be held physically or via video conferencing, but physical meeting mandatory at least once every three years.
Exempts prescribed companies from appointing an auditor; replaces certain affidavits with self-declarations.
Small company definition: paid-up capital upper limit increased to Rs 20 crore (from Rs 10 crore) and turnover to Rs 200 crore (from Rs 100 crore).
Merger approval threshold changed from 90% of shareholders to majority present and voting holding at least 75% of shares among those present and voting; creditor threshold reduced from 90% to 75%.
Buy-back limit: for prescribed classes, may be up to a prescribed percentage (existing 25% of paid-up capital and free reserves).
IBBI designated as Valuation Authority for registration and recognition of valuers.
NFRA powers expanded to specify regulations on investigation manner and issue advisory, censure, or warning.
Allows electronic service of prescribed documents by prescribed companies.
Prelims pointers
- Corporate Laws (Amendment) Bill, 2026
- Companies Act, 2013
- Limited Liability Partnership (LLP) Act, 2008
- Corporate Social Responsibility (CSR)
- Insolvency and Bankruptcy Board of India (IBBI)
- National Financial Reporting Authority (NFRA)
- Joint Parliamentary Committee
- Lok Sabha introduction: March 23, 2026
Mains angles
- Discuss the impact of decriminalisation of corporate offences on ease of doing business and corporate governance.
- Critically examine the changes in CSR thresholds and exemptions – do they dilute corporate responsibility?
- Analyse the implications of reduced merger approval thresholds for minority shareholder protection.
- Evaluate the role of IBBI as Valuation Authority and NFRA's expanded powers in ensuring financial discipline.
- How do the amendments to small company definitions and compliance simplifications promote MSME growth?