Finance Minister Nirmala Sitharaman moved a motion in Parliament to refer the Corporate Laws (Amendment) Bill 2026 to a 31-member Joint Parliamentary Committee (JPC) comprising 21 members from the Lok Sabha and 10 members from the Rajya Sabha. The JPC will examine the bill's provisions in detail and submit its report before the next session.
The bill proposes amendments to two key corporate legislations: the Companies Act 2013 and the Limited Liability Partnership (LLP) Act 2008. Its primary objective is to decriminalise minor and technical offences under these acts, replacing criminal penalties with civil fines. This is aimed at easing the compliance burden for businesses, especially startups and small enterprises, and improving India's ease of doing business rankings.
Key proposals in the bill include: removing imprisonment for minor procedural violations; introducing in-house adjudication mechanisms through the National Company Law Tribunal (NCLT); streamlining incorporation and dissolution procedures for LLPs; and enabling faster resolution of corporate disputes. Amendments to the Companies Act also seek to ease requirements for Related Party Transactions, simplify rules for private placement of securities, and reduce approval layers for corporate restructuring.
The referral of the bill to a JPC indicates the government's willingness to build broader political consensus on corporate reforms before enactment. Stakeholders from industry bodies, startup ecosystems, and legal professionals are expected to depose before the committee. The reforms are seen as part of India's continuing effort to make its corporate regulatory framework competitive with global standards.