The Joint Committee of Parliament examining the Corporate Laws (Amendment) Bill, 2026, on Wednesday heard the views of Finance Ministry officials and the National Financial Reporting Authority (NFRA) as part of stakeholder consultations on the proposed legislation.
Key Amendments Aim to Decriminalise Minor Defaults
The Bill seeks to amend the Limited Liability Partnership Act, 2008, and the Companies Act to facilitate ease of doing business, decriminalise minor procedural defaults, and modernise India's corporate governance architecture. The Joint Committee, headed by BJP MP Sudheer Gupta, is scrutinising the Bill introduced by Finance and Corporate Affairs Minister Nirmala Sitharaman in the Lok Sabha on March 23.
On Wednesday, NFRA Chairperson Nitin Gupta presented his views to the committee, with Full Time Member Smita Jhingran and other officials also in attendance. Finance Ministry officials also presented their perspectives to the panel.
Rationalising Penalties and Reducing Litigation
The proposed amendments aim to rationalise penalties and shift several minor procedural lapses from criminal liability to monetary penalties. NFRA operates under the administrative control of the Corporate Affairs Ministry. The reforms are also intended to streamline regulatory processes to reduce litigation and create a more facilitative environment for companies and LLPs.
The Bill proposes changes to modernise the country's corporate governance framework while reducing compliance burden. By moving minor procedural defaults out of the criminal ambit, the amendments are expected to lower litigation risk for businesses and LLPs. The committee is examining how these changes balance ease of doing business with accountability and investor protection.
Next Steps for the Bill
The Corporate Laws (Amendment) Bill, 2026, was referred to the joint committee after its introduction in March. The panel is expected to submit its report after completing consultations with regulators, industry bodies, and experts. Once passed by Parliament, the amendments would apply to companies governed under the Companies Act and LLPs registered under the 2008 Act, aligning penalty structures and compliance requirements with current business practices.
The government has positioned the Bill as part of broader reforms to simplify corporate compliance and encourage formalisation. The committee's hearings are a critical step in refining the legislation before it is presented for parliamentary approval.
