Corporate Laws (Amendment) Bill, 2026 Proposes Major Changes in Company Compliance Rules:

Shri Sudhir Gupta, MP, Chairman of the Joint Parliamentary Committee (JPC), presented a report on the Corporate Laws (Amendment) Bill, 2026, in Lok Sabha on August 03, 2026. Note that the bill is just a proposal presently and has not been made an effective law yet.

One of the key proposals is to expand the definition of a “small company” by increasing the paid-up capital limit from Rs 4 crore to Rs 20 crore and the turnover limit from Rs 40 crore to Rs 200 crore. This would allow more companies to benefit from simplified compliance requirements.

The bill also proposes allowing the government to exempt certain classes of companies from mandatory statutory audits. Further, changes have been suggested in Corporate Social Responsibility (CSR) provisions by increasing the net profit threshold for CSR applicability from Rs 5 crore to Rs 100 crore. The exemption limit for forming a CSR Committee is also proposed to be increased from Rs 50 lakh to Rs 5 crore.

In relation to auditors, the Committee has recommended reducing the cooling-off period for providing non-audit services after completion of an auditor’s term. The proposed restriction period has been suggested to be reduced from three years to one year.

The Bill also proposes making annual certification by professionals such as Chartered Accountants, Company Secretaries, Cost Accountants, or advocates for LLPs optional instead of mandatory. At the same time, it seeks to strengthen the powers of the National Financial Reporting Authority (NFRA).

Several technical and procedural defaults are proposed to be decriminalised to reduce unnecessary legal proceedings. The monetary threshold for compounding certain fraud-related offences is also proposed to be increased from Rs 10 lakh to Rs 25 lakh.

Additionally, a new framework has been proposed to allow conversion of certain SEBI- and IFSCA-regulated trusts into Limited Liability Partnerships (LLPs). These measures are intended to promote ease of doing business, but they will come into effect only after the bill is passed and notified as law.