INSITE - India- April 2026

CORPORATE LAWS (AMENDMENT) BILL, 2026

Summary: In a continued effort to modernise India’s corporate regulatory framework and enhance ease of doing business, the Companies (Amendment) Bill, 2026 introduces several significant changes.

The Companies (Amendment) Bill, 2026 proposes amendments across 88 sections of the Companies Act, 2013, focusing on key areas such as ease of doing business, corporate governance, and decriminalisation (including the shift from fines to a penalty-based regime). This article presents a comprehensive yet simplified overview of these changes, highlighting the most significant aspects from a Company Secretary’s perspective, and explaining them in clear, practical terms for ease of understanding.

In Detail: The Companies (Amendment) Bill, 2026, introduced on March 23, 2026, signals a comprehensive overhaul of the Companies Act, 2013, targeting 88 sections to modernize India's corporate regulatory framework. Central to this reform is the "digital-first" approach, which permanently codifies virtual and hybrid modes for Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs). While facilitating remote participation, the Bill maintains a safeguard for physical engagement by requiring at least one physical AGM every three years. To further alleviate compliance burdens, the Bill increases the thresholds for "small company" classifications (doubling paid-up capital limits to INR 200 million and turnover limits to INR 2 billion) and raises the Corporate Social Responsibility (CSR) net profit applicability threshold from INR 50 million to INR 100 million.

A significant shift in enforcement strategy is the widespread decriminalization of minor procedural defaults, replacing criminal liability with civil monetary penalties. Complementing these long-term legislative changes, the Ministry of Corporate Affairs (MCA) launched the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026), effective from April 15 to July 15, 2026. This scheme serves as a one-time amnesty window, allowing defaulting companies to file pending annual e-forms with a 90% waiver on additional fees. By providing this opportunity for companies to regularize their records or opt for voluntary strike-off or dormancy the MCA aims to clean up the corporate registry while significantly reducing litigation exposure for businesses before stricter enforcement protocols commence after the scheme concludes.

The Bill significantly revises the treatment of procedural defaults. A number of offences under the Companies Act, 2013 and the LLP Act, 2008 previously subject to criminal prosecution, including imprisonment are proposed to be reclassified as civil violations attracting monetary penalties. These include defaults such as non-compliance with Registrar requirements, failure to hold AGMs, certain breaches relating to inter-corporate loans, and lapses in maintaining statutory books of account.

The enforcement framework is also being streamlined through the introduction of an electronic In-House Adjudication Mechanism (IAM), replacing court-driven processes with an administrative adjudication system.

The penalty structure is standardised as follows:

• INR 100,000 for the initial contravention

• INR 500 per day for continuing defaults

• Subject to a maximum cap of INR 500,000

  
  

For directors, promoters, and Key Managerial Personnel (KMP), this marks a significant shift, as procedural non-compliances would no longer entail the risk of criminal prosecution, arrest, or prolonged litigation, but would instead be addressed through a monetary penalty regime.

The Companies (Amendment) Bill, 2026 introduces significant reforms aimed at simplifying compliance, strengthening corporate governance, and enhancing ease of doing business. Key changes include the adoption of digital communication mechanisms, greater flexibility in aligning financial year cycles, and a shift from fines to a penalty-based regime for certain non-compliances. Collectively, these amendments are designed to create a more agile and investor-friendly corporate environment. For Company Secretaries, staying abreast of these developments is essential to ensure effective compliance and support strategic decision-making.

Key Links: The Corporate Laws (Amendment) Bill, 2026

India's Corporate Laws Amendment Bill, 2026: A Business Guide

KEY TAKE AWAY - THE COMPANIES (AMENDMENT) BILL, 2026