The Corporate Laws (Amendment) Bill, 2026 was introduced in Parliament on 23rd March 2026. Boards and finance functions that are treating this as a routine legislative update may want to look more closely.
The Bill proposes 107 amendments to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008. It is presently before a Joint Parliamentary Committee, so the final text may evolve. The direction, however, is well established.
Decriminalisation
The headline change is decriminalisation. Several provisions across the Companies Act and LLP Act replace criminal penalties with monetary fines and adjudication mechanisms, reducing the risk of criminal liability for directors and officers in cases of procedural default. This should not be read as reduced enforcement. Under proposed Section 454B, unpaid civil penalties allow a Recovery Officer to attach bank accounts and property. The consequence for non-compliance remains real.
Other Changes of Note
- The net profit threshold for mandatory CSR has been raised from Rs 5 crore to Rs 10 crore.
- Restricted Stock Units and Stock Appreciation Rights now receive formal statutory recognition, with direct implications for how executive compensation is structured and disclosed.
- Prescribed classes of auditors are prohibited from providing non-audit services to a company, its holding, or subsidiary for three years following the end of their tenure.
Companies that review these changes only after enactment will find themselves reorganising structures under pressure. The time to assess exposure is now, while the legislation is still in committee.