Company Law Big Breaking: Government Moves Corporate Laws Amendment Bill, No Audit required for Certain classes of companies

The Corporate Laws (Amendment) Bill, 2026, is scheduled to be introduced in the Lok Sabha today, i.e., March 23, by the Union Finance Minister Nirmala Sitharaman. The bill aims at simplifying corporate regulations to ease the doing of business in India.

The bill proposes to amend the Companies Act, 2013, and the Limited Liability Partnership Act, 2008. These two pieces of legislation govern corporate entities and LLPs in India. Earlier this month, the bill was approved by the Union Cabinet.

The main objective of the bill is to reduce the compliance burden, fixing regulatory gaps and decriminalising minor offenses under the Companies Act, 2013, and the LLP Act, 2008.

The bill is expected to reduce criminal liability in procedural lapses by shifting the offences to monetary penalties. This will ensure that the minor noncompliance does not result in the risk of imprisonment.

The corporate law framework in India has been reformed many times since 2013. Amendments were made in 2015, 2017, 2019, and 2020 to ease compliance.

Some Important Amendments proposed by CORPORATE LAWS (AMENDMENT) BILL, 2026 are:

• Removal of Audit for Such Class or Classes of Company. Such Class or Classes of companies shall be further notified by Government.
• The LLP/ Company Law amendment now makes certification by CA/CS/CMA/Advocate applicable only if they are actually engaged in incorporation. So, no more blanket mandatory declaration.
• New Section 132A will be introduced, as per which an auditor cannot be appointed u/s 139 for certain companies unless they first intimate their ICAI registration details to National Financial Reporting Authority within the prescribed time and manner.
• Under the proposed Act, every Producer Company with an average annual turnover exceeding Rs. 5 crore (or such higher amount as may be prescribed) for three consecutive financial years is now mandatorily required to appoint an internal auditor.
• A new clause (fa) has been inserted in Section 134(3), mandating that the Board must now provide specific explanations or comments on every observation made by auditors which may have an adverse effect on the company’s functioning.
• Even after rotation, the outgoing auditor/audit firm cannot offer non-audit services to the company, its holding, or subsidiary for the next three years. [Section 144]