Finance Minister Nirmala Sitharaman introduced the Corporate Laws (Amendment) Bill 2026 in Lok Sabha on March 23, 2026. The Bill proposes amendments to two key statutes — the Companies Act 2013 and the Limited Liability Partnership (LLP) Act 2008 — with the primary objective of decriminalising minor procedural offences and reducing the compliance burden on startups and small businesses.
Under the proposed changes, several compoundable offences that currently attract criminal penalties will be reclassified as civil defaults subject to monetary penalties. This shift is expected to reduce litigation, improve the ease of doing business ranking, and encourage entrepreneurship. Small companies and one-person companies (OPCs) will benefit from simplified filing requirements and reduced annual compliance obligations.
For LLPs, the amendment seeks to align regulations with modern business practices, introduce online filing flexibility, and reduce mandatory forms. The Bill also proposes enhanced protection for minority shareholders in closely held companies and stronger safeguards against fraudulent promoters.
The Bill has been referred to a 31-member Joint Parliamentary Committee (JPC) with a mandate to submit its report by the Monsoon Session of Parliament (July–August 2026). The JPC will consult industry stakeholders, the Ministry of Corporate Affairs (MCA), and SEBI before finalising its recommendations.
This reform is part of the broader initiative under India's 'Viksit Bharat' vision to create a globally competitive and investor-friendly corporate legal framework.