On March 23, 2026, the Minister of Finance introduced the Corporate Laws (Amendment) Bill, 2026 (‘Bill’) in the Lok Sabha, which has since been referred to a Joint Parliamentary Committee. The Bill proposes amendments to the 2013 Act and the Limited Liability Partnership Act, 2008 (‘LLP Act’) to simplify compliance, strengthen regulation, and recognise evolving corporate practices.

Key proposals for the 2013 Act are as follows:

i.     Definition of Small Company: The paid-up share capital threshold for qualifying as a ‘small company’ has been increased from INR 10 crores (approx. USD 1.08 million) to INR 20 crores (approx. USD 2.15 million), and the turnover limit from INR 100 crores (approx. USD 10.8 million) to INR 200 crores (approx. USD 21.51 million).

ii.    Private Placement and Further Issuance of Share Capital: The Bill proposes to amend Section 42(2) and Section 62(1)(b) to recognize restricted stock units and stock appreciation rights, in addition to employee stock option plans, as forms of shareholder-approved executive compensation.

iii.    Buy-backs: The Bill proposes higher buy-back limits for prescribed classes of companies beyond the existing 25% cap and permits up to two buy-back offers per financial year (subject to a minimum six-month gap. It also extends buy-back eligibility to securities issued under schemes linked to the share capital value under Section 62(1)(b)), in addition to stock option and sweat equity schemes.

iv.    CSR: The net profit threshold for constituting a Corporate Social Responsibility (‘CSR’) committee under Section 135 has been raised from INR 5 crores (approx. USD 540,000) to INR 10 crores(approx. USD 1.07 million) (or as prescribed). The timeline for transferring unspent amounts to the Unspent CSR Account has been extended from 30 days to 90 days from the financial-year end. A CSR committee is not required where CSR spend does not exceed INR 1 crore (approx. USD 107,527) (increased from INR 50 lakh (approx. USD 53,763)) (or higher amount as prescribed). The Central Government has also been empowered to exempt prescribed classes of companies from CSR obligations.

v.     Provisions Governing Directors:

a.     Independent Directors: The independence eligibility criteria have been narrowed from the preceding three financial years to the current year, with continued eligibility required throughout the term of appointment;

b.    Additional and Casual-Vacancy Directors: The tenure of an additional director would run until the earlier of (1) the next general meeting, or (2) three months from appointment (replacing the current formulation of ‘up to the date of the next annual general meeting’);

c.    Disqualification of Directors: The existing disqualification under Section 164(1)(g) for conviction under Section 188 (related party transactions) is broadened to cover persons subjected to a penalty for default under that section. New clauses (j) and (k) are proposed:- clause (j) disqualifies any person who has served as auditor, secretarial auditor, cost auditor, registered valuer, or insolvency professional of the company (or its holding, subsidiary, or associate company) during the preceding three financial years or the current financial year; clause (k) disqualifies persons whom the board has not assessed as ‘fit and proper’ under prescribed criteria; and

d.    Disclosure of Interest by Directors: The mandatory annual first-meeting disclosure under Section 184(1) is proposed to be omitted and subsequent disclosures would be required only upon an actual change in previously disclosed interests.

vi.    Merger Schemes: The Bill deletes references to the Insolvency and Bankruptcy Code, 2016 (‘IBC’) in Section 230(1), thereby excluding companies in IBC liquidation from initiating compromises or arrangements under the 2013 Act. A new proviso in Section 230 directs all applications under Sections 230 to 233 to be filed with the National Company Law Tribunal (‘Tribunal’) having jurisdiction over the transferee or resultant company. For fast-track mergers, the approval thresholds are proposed to be reduced to align with Tribunal-sanctioned schemes under Section 230: member approval from 90% of total shares to a majority holding at least 75% in value (present and voting), and creditor approval from nine-tenths to 75% in value.