COMPANIES AMENDMENT ACT 2026 PROPOSED KEY CHANGES UNDER COMPANIES ACT, 2013

 

COMPANIES AMENDMENT ACT 2026

PROPOSED KEY CHANGES UNDER

 COMPANIES ACT, 2013

EXISTING PROVISIONS	PROPOSED AMENDMENT
SECTION 7 OF THE COMPANIES ACT, 2013, GOVERNS COMPANY INCORPORATION, REQUIRING A DECLARATION FROM AN ADVOCATE, CHARTERED ACCOUNTANT, COST ACCOUNTANT, OR COMPANY SECRETARY IN PRACTICE.	Now Certification by professionals is optional
AGM/EGM	Hybrid & Virtual Meetings Legalized • AGM/EGM can be held: Physical/ Virtual/ Hybrid. • Mandatory: At least 1 physical AGM in 3 years.
REDUCED COMPLIANCE FOR SMALL / OPC / DORMANT COMPANIES	Minimum Board Meetings: Reduced to 1 per year.
INDEPENDENT DIRECTOR NORMS TIGHTENED	DISQUALIFICATION extended to: Current financial year (not just past 3 years) w.r.t. employment or professional association. • if associated with a legal or consulting firm where transactions with the company is 10% or more of the firm's gross turnover (this limit of 10% may be reduced).
CONFIRMATION OF  ADDITIONAL DIRECTORS	In the Next AGM or 3 months (whichever earlier).
NEW GROUNDS FOR DIRECTOR DISQUALIFICATION:	who have acted as an auditor, secretarial auditor, cost auditor, registered valuer, or insolvency professional of the company (or its holding, subsidiary, or associate) in the preceding three financial years or the current financial year and person must be assessed by the Board as a "fit and proper person" in accordance with prescribed criteria.
PENALTY UNDER SECTION 166:BREACH OF DUTY OF A DIRECTOR	Listed companies Rupees 5 lakh fine; and for Other companies Rupees 2 lakh fine.
SIMPLIFIED KMP RESIGNATION	KMP can directly inform ROC if company fails to inform ROC about the resignation.
MANDATORY DORMANT STATUS	Eligible inactive companies must (not may) apply for dormant status.
REVIVAL OF COMPANIES	Regional Director to handle revival matter (currently, power with Tribunal/NCLT)
COMPANIES NOT REQUIRING AUDITORS	Prescribed classes of companies which fulfil such conditions, as may be provided by rules, shall not be required to appoint auditors.
DECRIMINALIZATION OF OFFENCES	Minor & procedural defaults → civil penalties Reduced criminal liability for companies
SHARE BUYBACK FLEXIBILITY	2 buybacks allowed in a year (with gap conditions) Efficient capital distribution tool
FAST-TRACK MERGERS SIMPLIFIED	Approval threshold: 75% shareholders Covers startups, small companies, holding-subsidiary mergers
ENHANCED POWERS TO NFRA	Wider definition of professional misconduct Stricter penalties, debarment & enforcement
RECOGNITION OF NEW COMPENSATION TOOLS	Introduction of innovative executive compensation structures
FLEXIBILITY FOR LLP & AIF STRUCTURES	AIFs may operate via LLP structure Better governance clarity

 

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