Finance Minister Nirmala Sitharaman introduced the Corporate Laws (Amendment) Bill 2026 in the Lok Sabha on March 23, 2026. Immediately after introduction, the Bill was moved for referral to a Joint Parliamentary Committee (JPC) for detailed examination.
The Bill proposes amendments to two key pieces of corporate legislation: the Companies Act, 2013, and the Limited Liability Partnership (LLP) Act, 2008. The central objective of the Bill is to decriminalise minor procedural offences under these laws and ease the compliance burden on startups, small businesses, and entrepreneurs.
Under the existing Companies Act 2013, several minor or technical violations — such as late filing of forms or procedural lapses — attract criminal liability. These provisions have long been criticised for being disproportionate and for creating a hostile environment for businesses, particularly startups. The 2026 Amendment seeks to convert these criminal offences into civil penalties, ensuring that genuine and minor lapses do not result in criminal prosecution.
For the LLP Act 2008, similar rationalisation is proposed. LLPs are a popular vehicle for small businesses and startups in India, and reducing criminal penalties for minor violations is expected to make the LLP structure more attractive.
The move is in line with India's broader ease of doing business reforms and the government's stated commitment to reducing the regulatory burden on businesses. The referral to a Joint Parliamentary Committee ensures detailed scrutiny involving members of both Houses of Parliament, and stakeholders from industry and civil society may be consulted during this process.
The Bill is expected to improve India's position in global business environment rankings and support the government's vision of Viksit Bharat 2047 by fostering an enabling environment for enterprise.