CORPORATE LAWS (AMENDMENT) BILL, 2026 PROPOSES TO CHANGE THE COMPANIES ACT, 2013 AND THE LLP ACT, 2008 SEPARATELY---COMPANIES ACT, 2013 – OFFENCES DECRIMINALISED

 CORPORATE LAWS (AMENDMENT) BILL, 2026 PROPOSES TO CHANGE THE COMPANIES ACT, 2013 AND THE LLP ACT, 2008 SEPARATELY---COMPANIES ACT, 2013 – OFFENCES DECRIMINALISED

CSR NORMS

•     Threshold for mandatory CSR spending raised to ₹10 crore net profit.

•     Non-compliance below this threshold will no longer attract criminal liability.

PROCEDURAL DEFAULTS

•     Delays in filing annual returns, financial statements, or other routine forms will be treated as civil lapses.

SHARE BUYBACKS

•     Multiple buybacks permitted with relaxed rules. Minor violations in procedure decriminalised.

AGMS & M&A

•     Companies allowed to hold hybrid Annual General Meetings (AGMs).

•     Simplified mergers & acquisitions procedures; procedural lapses decriminalised.

REGIONAL DIRECTORS’ POWERS

•     More authority given to regional directors to handle civil penalties instead of courts.

LLP ACT, 2008 – OFFENCES DECRIMINALISED

ANNUAL RETURN & FILING DELAYS

•     Late filing of annual returns or statements of accounts will attract civil penalties only.

SMALL LLPS

•     Relaxed compliance norms; minor defaults decriminalised to encourage startups and professional firms.

PARTNERSHIP FLEXIBILITY

•     Constitution of multi-disciplinary partnership firms allowed; procedural lapses in formation treated as civil offences.

COMPARISON TABLE

AREA	EARLIER POSITION	AMENDMENT (2026 BILL)
CSR COMPLIANCE	Criminal liability for non-compliance	Civil penalty; net profit threshold raised to ₹10 crore
FILING DELAYS	Criminal offence	Civil penalty only
SHARE BUYBACKS	Strict limits, criminal liability for violations	Multiple buybacks allowed; minor lapses decriminalised
AGMS	Physical only	Hybrid AGMs permitted
LLP FILING	Criminal liability for delays	Civil penalties only
LLP PARTNERSHIPS	Limited scope	Multi-disciplinary partnerships allowed

WHY THIS MATTERS?

•     For startups: Lower regulatory burden, faster incorporation, and reduced risk of criminal liability for minor lapses.

•     For SMEs: Encourages entrepreneurship by cutting red tape.

•     For IFSC entities: Provides clarity for global financial operations in India.

•     For corporate governance: While easing compliance, it raises debates about whether decriminalisation could weaken accountability.

 

YOUR COMPLIANCE PARTNER – R V - SECKAR , FCS, LLB 79047 19295