Corporate Laws (Amendment) Bill 2026: What It Proposes for Companies and LLPs — and What Is Not Law Yet

Let me say the most useful thing first, because most coverage of this Bill buries it: nothing in the Corporate Laws (Amendment) Bill, 2026 is law today. Not the higher small-company limits. Not the trust-to-LLP conversion. Not the auditor relief. If you change a filing, a board paper or a client commitment on the strength of this Bill, you are building on a proposal. That said, this is a serious proposal — 107 clauses across the Companies Act, 2013 and the LLP Act, 2008, already examined by a Joint Parliamentary Committee — and directors and designated partners who understand what it proposes will be ready if and when Parliament passes it. This guide separates the two piles carefully: what the Bill proposes, and what the law still says.

What does the Corporate Laws (Amendment) Bill, 2026 propose — and is it law?

The Bill proposes wide changes to the Companies Act, 2013 and the LLP Act, 2008: decriminalising procedural offences, raising the small-company ceiling to ₹20 crore paid-up capital and ₹200 crore turnover, Specified IFSC LLPs, trust-to-LLP conversion, and IBBI as valuation authority. Introduced on 23 March 2026, it is not law yet. File under the Acts as they stand.

Where the Bill stands today

The timeline matters, so here it is without decoration.

• 23 March 2026: the Bill (Bill No. 85 of 2026) was introduced in the Lok Sabha and referred the same day to a Joint Parliamentary Committee.
• March to July 2026: the Committee, chaired by Mr Sudhir Gupta, held 25 sittings, received 130 memoranda and heard 83 experts and representatives of ministries and regulators.
• 3 August 2026: the Committee presented its report to Parliament, recommending adoption of the Bill with clause-wise modifications.
• Since then: the Bill has been passed by neither House. It has not received Presidential assent. No provision has been notified into force.

A committee report is a recommendation. It is not a vote, and it is not commencement. The Government may accept the Committee's changes, accept some, or bring its own amendments when the Bill is taken up for consideration. Until both Houses pass a final text, the President assents and the provisions are notified, the Companies Act and the LLP Act read exactly as they did before 23 March 2026. Every proposal below is therefore written in the language it deserves: proposes, would, if enacted.

What the Bill proposes for companies

Decriminalisation: jail and fine replaced by civil penalty, for a defined list

The Bill proposes to decriminalise several offences under both Acts and substitute a civil penalty for imprisonment or fine. On the PRS summary of the Bill as introduced, the list includes wilful failure to furnish information about the affairs of a producer company, contravention of Rules, failure to furnish information or a document required by the Registrar, violation of requirements on books of account, and failure to comply with a requisition of the Registrar other than a summons. These are procedural defaults — the kind that today can drag a director into a criminal process for what is, in substance, a paperwork failure. The direction is welcome. The detail will matter: which offences stay criminal, and at what penalty levels, is exactly the sort of thing the Committee's clause-wise work touched, so do not plan around the introduced list alone.

Small companies: a higher ceiling is proposed — the limits in force are lower

This is the proposal most likely to be misquoted to you, so let me be precise. Section 2(85) defines a small company by limits prescribed within a statutory ceiling. The Bill proposes to raise that ceiling to ₹20 crore of paid-up share capital and ₹200 crore of turnover. Raising a ceiling does not itself change any company's status. The actual limits are set by rules, and even if the Bill passes, a further notification would be needed to move them.

The limits in force today are ₹10 crore paid-up capital and ₹100 crore turnover, set by G.S.R. 880(E) with effect from 1 December 2025. If someone tells you the small-company limit is already ₹20 crore and ₹200 crore, they are quoting a proposal as if it were law. If someone quotes you ₹4 crore and ₹40 crore, they are quoting history. Our explainer on the small company limits of ₹10 crore and ₹100 crore sets out the in-force test and what it changes for filing — MGT-7A, board meetings, halved penalties under section 446B. Plan on those numbers. Watch the Bill for what may come next.

CSR, meetings, auditors and mergers

Four more company-side proposals deserve a line each.

• CSR threshold. The Bill proposes to raise the net-profit trigger for CSR applicability from ₹5 crore to ₹10 crore (or such other sum as may be prescribed), and states that companies meeting prescribed conditions would not be required to comply with the CSR provisions. The net-worth trigger of ₹500 crore and turnover trigger of ₹1,000 crore stay as they are in the proposal.
• Meetings. The Bill proposes that a company may hold its AGM physically or through video conferencing or other audio-visual means, but must hold a physical meeting at least once in every three years. It also proposes electronic service of prescribed documents for prescribed classes of companies, and self-declarations in place of certain affidavits.
• Auditor appointment relief. The Bill proposes that companies meeting prescribed conditions would be exempt from appointing an auditor. Note what is missing: the conditions are not in the Bill. They would come in rules, later. The Joint Committee recommended confining this exemption to private companies. Until a final text and rules exist, every company — small ones included — must keep appointing a statutory auditor under section 139 as it stands.
• Fast-track mergers. For schemes under the fast-track route, the Bill proposes to lower the shareholder approval threshold from 90% of total shares to a majority of members present and voting holding at least 75% of the shares held by those present and voting, and the creditor threshold from 90% to 75%. If enacted, that would make section 233 mergers easier to carry. Today, 90% is still the law.

Valuation, NFRA and employee schemes

The Bill proposes to designate the Insolvency and Bankruptcy Board of India (IBBI) as the Valuation Authority — granting registration to valuers, recommending valuation standards to the Central Government and overseeing compliance. It proposes expanded powers for the National Financial Reporting Authority, including the power to specify how investigations are conducted and to issue advisory, censure or warning. And it proposes to recognise employee compensation schemes beyond stock options, naming arrangements such as Restricted Stock Units and Stock Appreciation Rights. Each of these would matter to a different reader — valuers, auditors, startups paying senior hires in equity-linked pay. None of them changes a single filing you make this month.

What the Bill proposes for LLPs

For many readers of this site, the LLP half of the Bill is the more interesting half. If you are still deciding on the structure itself, our LLP registration guide covers the law as it stands today, and our limited liability partnership service page shows how registration works in practice — read the proposals below as a possible future layer over both, not a replacement.

A separate framework for Specified IFSC LLPs

The Bill proposes a dedicated regime for LLPs set up in an International Financial Services Centre and regulated by the IFSC Authority — "Specified IFSC LLPs". It would insert definitions of IFSC, the IFSC Authority, permitted foreign currency and Specified IFSC LLP into section 2 of the LLP Act. A Specified IFSC LLP would have to keep its registered office inside the IFSC, carry the IFSC LLP suffix in its name, state objects covering permitted financial services activities, and account for partner contributions in a permitted foreign currency, with books and financial statements kept in that currency subject to exceptions the IFSC Authority allows. Existing IFSC entities would get a transition window. This is GIFT City plumbing. If you run a domestic LLP in Indore or Jaipur, it proposes nothing that touches you.

Trusts converting into LLPs: the proposed section 57A

The Bill proposes a new section 57A, with a Fifth Schedule, to let a "specified trust" convert into an LLP. On the Bill as described by PRS and commentators, a specified trust is one established under the Indian Trusts Act, 1882 or another Central or State Act, registered with SEBI or the IFSC Authority, and engaged in prescribed activities. The conversion would need consent of at least 75% of investors, the partners of the resulting LLP would be exclusively the trustees of the trust, and assets, liabilities, contracts and proceedings would transfer to the LLP, with the trust deemed dissolved. Think of the use case: investment vehicles currently run as trusts that want an LLP's structure. It is a narrow, regulated door — not a general route for family trusts, and not open at all until the Bill passes and rules prescribe the detail.

Valuation for LLPs: the proposed section 33A

The Bill proposes a new section 33A under which section 247 of the Companies Act — the registered-valuer framework — would apply to LLPs, with suitable changes, for valuing a partner's contribution, or an LLP's property, assets, net worth or liabilities. Today, LLP valuations sit in a thinner framework, largely Rule 23 of the LLP Rules for non-cash contributions. A single valuer regime across companies and LLPs would be tidier. It remains a proposal.

The Bill also proposes LLP-side decriminalisation in step with the company side, and an appeal route against certain Registrar decisions. The pattern is consistent: procedural pain down, structural options up — if Parliament agrees.

Proposal vs law in force: keep this table

What you should — and should not — do now

Do nothing differently in your filings. That is the honest headline. File under the Acts as they stand, test small-company status at ₹10 crore and ₹100 crore, appoint your auditor, and hold your meetings under today's rules.

What is worth doing is quieter. If you are structuring something long-lived — a fund vehicle that might one day want the trust-to-LLP route, an IFSC presence, a merger you expect to run next year — note where the Bill would change the terrain and avoid locking yourself into a structure that the proposal would make awkward. And if a consultant quotes you the ₹20 crore limit, or tells you small companies no longer need auditors, ask them for the notification. There isn't one. That one question will save you more than most advice.

Mistakes people are already making with this Bill

• Treating the Committee report as passage. The report of 3 August 2026 recommends adoption with modifications. Both Houses still have to pass the Bill.
• Using ₹20 crore / ₹200 crore as today's small-company test. The in-force prescribed limits are ₹10 crore and ₹100 crore. The Bill proposes raising the ceiling within which limits are prescribed — a two-step change, neither step complete.
• Skipping an auditor appointment. No class of company is exempt today. The proposed exemption has no conditions published, because the conditions would be prescribed later by rules.
• Waiting to file, "because the law is changing". Decriminalisation proposals do not pause today's due dates or today's penalties.
• Planning a trust conversion now. Section 57A does not exist yet. A specified-trust conversion attempted today has no statutory route.

Should you track this yourself?

You can. PRS Legislative Research maintains the Bill page, and MCA circulars will carry any commencement if it comes. But most founders I know do not need another tracker in their life — they need one clear alert when a proposal becomes law and changes a number they file by. That is a fair division of labour: you run the business, someone who reads Gazette notifications for a living watches the Bill.

If you are weighing an LLP structure today — for a new venture, a professional practice or a holding arrangement — our limited liability partnership service page sets out how registration works under the law in force, and we will tell you plainly if any part of this Bill, once passed, changes the advice for your facts.

Frequently asked questions

Is the Corporate Laws (Amendment) Bill, 2026 law now?

No. It was introduced in the Lok Sabha on 23 March 2026, examined by a Joint Parliamentary Committee that reported on 3 August 2026, and has been passed by neither House. Until it is passed, assented to and notified, the Companies Act, 2013 and LLP Act, 2008 apply exactly as before.

What are the small company limits today?

Paid-up share capital up to ₹10 crore and turnover up to ₹100 crore, prescribed by G.S.R. 880(E) with effect from 1 December 2025. The Bill proposes raising the statutory ceiling to ₹20 crore and ₹200 crore, which would allow higher limits to be prescribed later. It does not change today's test.

Can a trust convert into an LLP now?

No. The Bill proposes a new section 57A and a Fifth Schedule to allow specified trusts — those registered with SEBI or the IFSC Authority and meeting other conditions — to convert into LLPs with at least 75% investor consent. That route does not exist in the LLP Act today.

What is a Specified IFSC LLP?

A category the Bill proposes: an LLP set up in an International Financial Services Centre and regulated by the IFSC Authority, with its registered office in the IFSC, the IFSC LLP suffix in its name, and partner contributions accounted for in a permitted foreign currency. It is a proposal, aimed at GIFT City-type activity.

Do small companies still need an auditor?

Yes. Every company must appoint a statutory auditor under section 139 as the law stands. The Bill proposes an exemption for classes meeting prescribed conditions, and the Joint Committee recommended limiting it to private companies — but no exemption is in force and no conditions have been prescribed.

What should my company do differently because of this Bill?

Nothing in its filings. Keep complying with the Acts as they stand. The only sensible step is awareness: if you are planning a merger, an IFSC presence or a trust-held investment vehicle for next year, note the direction of the proposals and take advice again once the Bill's final text is known.