Joint Committee Recommends Changes to Corporate Laws (Amendment) Bill, 2026

The Joint Committee of Parliament examining the Corporate Laws (Amendment) Bill, 2026, chaired by Shri Sudheer Gupta, presented its report to the Lok Sabha and laid it in the Rajya Sabha on August 3, 2026. The Committee broadly endorsed the Bill which amends the Companies Act, 2013 and the Limited Liability Partnership Act, 2008 to ease compliance, decriminalise procedural defaults, and strengthen governance while recommending a set of targeted modifications after examining the more than 900 suggestions it received from stakeholders.

The provisions of the Bill, introduced in the Lok Sabha on March 23, 2026, were covered in our earlier update. The present note focuses on the principal recommendations that modify the Bill; the Committee recorded 169 numbered observations and recommendations across the Bill’s clauses. The Committee adopted the report at its 25th sitting on July 31, 2026. Two of the Committee’s 31 Members submitted notes of dissent.

Key Recommendations of the Committee:

• Annual filing for regulated LLPs: For prescribed classes of LLPs regulated by SEBI or the IFSCA, including Alternative Investment Funds (AIFs), the Committee recommended that Clause 6 be modified so that changes to the LLP agreement are filed annually, rather than within 30 days of each change (proviso to Section 23(2), Limited Liability Partnership Act, 2008), addressing the frequent partner entry and exit that had discouraged AIFs from adopting the LLP structure. The parallel relief for reporting changes in partners under Section 25(2) (Clause 7) was accepted as introduced; changes in designated partners must still be intimated within 30 days under Section 9 of the LLP Act.
• Confidentiality of investor information: It recommended inserting a proviso to Section 36 of the LLP Act, which provides for public inspection of documents kept by the Registrar, so that the inspection requirement does not apply to prescribed classes of LLPs registered and regulated by SEBI or the IFSCA, protecting the privacy and commercial interests of investors such as sovereign funds, institutions, and family offices.
• New LLP provisions: The Committee recommended inserting new Sections 69A, 69B and 69C in the LLP Act: refund of fees where a filing fails for technical reasons, applying Section 403A of the Companies Act, 2013 mutatis mutandis; rectification of clerical, arithmetical, typographical or factual errors in filed documents, applying Section 398A of that Act; and application of the consent and data-processing provisions of the Digital Personal Data Protection Act, 2023 to the electronic records specified in Sections 36 and 68 of the LLP Act.
• Category I and II AIFs: In framing the rules, the Ministry of Corporate Affairs should consider specifically including Category-I and Category-II AIFs within the “prescribed class” of LLPs eligible for the reliefs on annual reporting and foreign currency contributions.
• Director disqualification (Clause 54): The Committee recommended dropping the proposed “fit and proper person” criterion under Section 164(1)(k) altogether, holding that the standard could not be applied objectively across the different categories of director and that leaving it to subordinate legislation was excessive delegation. It also recommended omitting the proposed disqualification for having been “subjected to penalty for default”, which is inconsistent with the Bill’s own decriminalisation objective, and reducing the cooling-off period for auditors, secretarial auditors, cost auditors, registered valuers and insolvency professionals to two years.
• Buy-back (Clause 29): The Committee supported the additional flexibility but found the drafting unclear on the permissible limit and on how the two-offer window is reckoned. It recommended that Section 68(2)(c) be redrafted to allow a prescribed class of companies to buy back up to 25% “or such higher per cent” of paid-up capital and free reserves, subject to an express cap of 25% of total paid-up equity capital in any financial year, and that Section 68(2)(g) specify that the two offers fall within one year from commencement of the first offer, with no buy-back within six months of the closure of the preceding one.
• Registration of charges (Clause 30): The Committee supported the extension from 60 to 120 days but found that framing it by reference to a “class of companies” did not make the legislative intent to benefit small companies clear, and recommended that Section 77(1) be reworded accordingly.
• Voluntary strike-off (Clause 74): The Ministry agreed, on the Committee’s observation, to amend the clause to require the Registrar to decide a strike-off application within 60 days of a complete application, recording reasons for any delay, and to extend voluntary strike-off to inactive Section 8 companies with no assets, liabilities or public funds.
• Superseded statutory references: The Committee recommended a comprehensive review of both the LLP Act and the Companies Act, 2013 to replace lingering references to repealed enactments, notably the Code of Criminal Procedure, 1973, replaced by the Bharatiya Nagarik Suraksha Sanhita, 2023 with effect from 1 July 2024.
• CSR (Clause 43): The Committee endorsed the raised thresholds under Section 135 (net profit trigger from ₹5 crore to ₹10 crore, and the CSR Committee exemption from ₹50 lakh to ₹1 crore, each “or such sum as may be prescribed”), but recommended that Clause 43 be modified to build safeguards around the proposed negative list of entities ineligible to receive CSR contributions: objective and transparent criteria based solely on statute or orders of a competent authority, operation only for the period and conditions in the notification, and a statutory route to removal once the grounds cease. The Committee also observed that while Clause 43 extends the period for transferring unspent CSR amounts from thirty to ninety days, no matching change was proposed for amounts earmarked for ongoing projects after the third financial year, and recommended that the ongoing-project timeline be extended to ninety days on the same lines. It separately asked the Government to examine permitting CSR contributions in kind, with valuation, verification and disclosure safeguards.
• NFRA (Clauses 40 and 41): The Committee sought several modifications to the new Sections 132A–132K framework: deletion of the words “general or” from the delegation power proposed in Clause 40(d); confining “professional or other misconduct” to audit matters; removal of the six-month imprisonment option from proposed Section 132(4A)(a)(i), consistent with the Bill’s decriminalisation objective; reduction of the penalties proposed under Sections 132A(3) and 132C(2); a requirement that NFRA hold an enquiry before issuing directions under Section 132C; alignment of recovery under Section 132D(3) with the new Section 454B; and omission of Clause 40(h) in its entirety, so that the power to appoint NFRA’s secretary and employees under Section 132(11) stays with the Central Government rather than passing to the Authority.
• Fast-track mergers: The Bill cuts the member approval threshold under Section 233 from 90% to three-fourths in value of those present and voting. The Committee took the view that this reduction, even with publication of the scheme for comment, was not a sufficient answer to minority shareholder concerns, and recommended inserting a proviso after Section 233(1)(b) giving dissenting shareholders a fair-value exit or buy-out option in such manner as may be prescribed. It separately recommended that Section 233(1)(d) be redrafted so that the reduced creditor threshold of three-fourths is computed on creditors present and voting, aligning the drafting with Section 230, and that a definite timeline be fixed, by amendment or rules, requiring the Registrar or C-PACE to decide a Section 233 application within 60 days, recording reasons for any delay, failing which the application is deemed approved.
• Conversion of specified trusts: The Bill’s framework contemplates single-scheme trusts. The Committee recommended an enabling carve-out for multi-scheme specified trusts registered or regulated by SEBI or the IFSCA, together with a detailed framework for the consequential issues that conversion raises.
• Register of members: The Committee recommended a new Section 88(2A) barring entry of notice of any trust in the register of members or debenture holders. The trustee is recorded as the legal owner, while the trust may be entered as the beneficial owner under the relevant provisions of the Act. Companies already carrying such entries have a year to clear them.
• Director age limits: The Committee recommended that the Bill be modified to amend Section 196(3)(a), reducing the minimum age for appointment as Managing Director, Whole-time Director or Manager from 21 to 18, and raising the upper age from 70 to 75.
• EGM notice for listed companies (Clause 35): The seven-day notice for extraordinary general meetings held wholly by video conferencing was accepted for companies generally, but on SEBI’s submission the Committee recommended a separate proviso requiring not less than fifteen days’ notice where the company is listed, given the nature of resolutions typically put to an EGM.
• Cross-border schemes (Clause 67): The single-bench treatment of schemes of arrangement under Section 230 was accepted, subject to a proviso clarifying that the single-bench requirement does not apply to applications under Section 234, which governs cross-border mergers.
• Legacy treasury shares (Clause 70, new Section 233A): Where a transferee company holds shares in its own name or through a trust as a result of a pre-2013 compromise or arrangement, those shares would have to be dealt with or disposed of within three years of the date on which the amending Act commences. Shares not disposed of within that window would fall to be cancelled and extinguished, which would be deemed a reduction of share capital to which Section 66 would not apply, and continuing default would attract a penalty of ₹10,000 per day on the company and every officer in default. The Committee suggested that affected companies, particularly older entities that underwent pre-2013 restructurings, carry out a shareholding audit to identify such holdings.
• Compounding (Clause 97): The Committee endorsed raising the Regional Director’s compounding jurisdiction from offences punishable with fine up to ₹25 lakh to ₹1 crore, noting the Ministry’s estimate that roughly 90% of compounding applications would fall to Regional Directors. It recommended that Clause 97 be rephrased to insert “or any other person” after “officer” wherever it appears in Section 441, except where followed by “authorised by the Central Government”, and to provide statutory backing for end-to-end electronic compounding.

Beyond the recommendations above, the Committee accepted a number of the Bill’s provisions without amendment. These include the enhanced small company thresholds under Section 2(85), the extension of share-linked schemes to restricted stock units and stock appreciation rights, the reduced board-meeting and director-interest disclosure requirements, the proportional penalty regime under Section 446B and the raised fraud thresholds under Section 447.

The Bill, as reported by the Joint Committee, is annexed to the report and now returns to Parliament for consideration. The Bill is not yet law i.e. under Clause 1 it would come into force only on such date as the Central Government notifies in the Official Gazette, and different dates may be appointed for different provisions.

This note is general information on a pending Bill, current as at 5 August 2026, and is not legal advice.