> **Legal basis:** Companies Act, 2013 and Limited Liability Partnership Act, 2008, as proposed to be amended by the Corporate Laws (Amendment) Bill, 2026 (Bill No. 85 of 2026) — Effective: not yet in force; pending passage by both Houses of Parliament and Presidential Assent. Source: https://prsindia.org/billtrack/the-corporate-laws-amendment-bill-2026. Last updated: September 2026. The Corporate Laws (Amendment) Bill, 2026 has not been passed into law. It was introduced in the Lok Sabha on March 23, 2026 by Finance and Corporate Affairs Minister Nirmala Sitharaman, carries 107 clauses amending the **Companies Act, 2013** and the **Limited Liability Partnership Act, 2008**, and the Joint Parliamentary Committee tabled its report endorsing the Bill (with modifications) on August 3, 2026. It still needs to clear both Houses of Parliament and receive Presidential Assent before a single provision takes effect. That distinction matters more than the changes themselves. Every year I see companies act on a Bill the moment a JPC report or a budget speech mentions it — and every year some of them end up on the wrong side of the *current* law because they assumed the *proposed* law was already in force. Nothing below is actionable today. Treat this as a heads-up, not a compliance instruction. ## What the Bill Proposes to Change **CSR threshold — Section 135, Companies Act 2013.** The Bill proposes raising the net profit trigger for mandatory CSR spending from ₹5 crore to ₹10 crore. Under the current law, any company crossing net worth of ₹500 crore, turnover of ₹1,000 crore, or net profit of ₹5 crore must spend 2% of average net profit of the preceding three years on CSR. If this change goes through, companies with net profit between ₹5 crore and ₹10 crore that don't meet the net worth or turnover triggers would fall out of mandatory CSR — but only after Presidential Assent and notification. **Fast-track merger threshold — Section 233, Companies Act 2013.** Section 233 lets small companies, holding companies, wholly owned subsidiaries, and startups merge through a Registrar-supervised route without going to the NCLT. Today that route requires approval from 90% of shareholders and 90% of creditors — a bar that one dissenting minority shareholder can block. The Bill proposes bringing this down to 75% of members present and voting (holding at least 75% of shares), with creditor approval similarly reduced to 75%. That would align the fast-track threshold with ordinary special-resolution requirements and make holding-subsidiary restructuring genuinely workable for the companies that currently get stuck. **Decriminalisation of procedural defaults.** The Bill proposes moving a set of procedural lapses — failure to furnish information to the Registrar, improper maintenance of statutory registers, and non-compliance with ROC requisitions — out of criminal prosecution before a Magistrate under Section 441 and into civil adjudication under Section 454, handled by a Registrar-level adjudicating officer. This continues the decriminalisation direction set by the Companies (Amendment) Act, 2020, and treats procedural lapses proportionately rather than as criminal matters. **Meeting modernisation.** Eligible companies would be permitted to hold Annual General Meetings entirely by video conferencing, with a physical AGM required at least once every three years. Electronic service of notices and documents to members would also be formally permitted. **Auditor appointment relief for small companies.** The Bill proposes waiving mandatory auditor appointment requirements for qualifying small companies. The eligibility threshold is not yet finalised in the text available. **LLP Act, 2008 — trust conversion.** The Bill enables specified trusts — registered with regulatory authorities and engaged in prescribed activities — to convert into Limited Liability Partnerships. This is relevant for investment trusts weighing the LLP-AIF structure for IFSC/GIFT City operations. **NFRA powers — Section 132, Companies Act 2013.** The Bill proposes expanding the National Financial Reporting Authority's disciplinary toolkit to include advisories, censures, and formal warnings — graduated responses short of a monetary penalty — alongside its existing powers. That builds a spectrum running from advisory through censure, warning, monetary penalty, and debarment. For audit firms, an advisory or censure short of a penalty would still likely carry public disclosure and reputational consequences, which is a reason to engage a qualified Chartered Accountant early if NFRA correspondence arrives, rather than waiting for a formal penalty stage. > **Key point:** Every change in the Corporate Laws (Amendment) Bill, 2026 remains proposed law and takes effect only after Presidential Assent and official notification. ## Current Position vs Proposed Position | Area | Current position (in force) | Proposed position (Bill, 2026) | When it activates | |---|---|---|---| | CSR net profit trigger — Sec 135 | ₹5 crore | ₹10 crore | On Presidential Assent | | Fast-track merger approval — Sec 233 | 90% shareholders and 90% creditors | 75% shareholders and 75% creditors | On Presidential Assent | | Procedural defaults | Criminal prosecution (Sec 441) | Civil adjudication (Sec 454) | On Presidential Assent | | AGM format | Physical mandatory | VC eligible, physical once every 3 years | On Presidential Assent | | NFRA response toolkit | Penalty or no action | Advisory → censure → warning → penalty → debarment | On Presidential Assent | ## What to Do Right Now Continue complying with the law as it stands. Keep spending on CSR at the ₹5 crore net profit trigger if you meet it. Keep meeting the 90% approval bar for fast-track mergers under Section 233. Continue treating the procedural defaults listed above as matters that fall under existing criminal-prosecution provisions until the amendment is notified. Acting early on any of these — for instance, cutting a CSR budget because the threshold might rise — creates a default under the law that actually governs you today. What you can usefully do now is plan. If your company sits in the ₹5–10 crore net profit band with no separate net worth or turnover trigger, model what your CSR obligation looks like both ways. If a merger has stalled at the 90% threshold, keep the scheme documentation ready so it can move quickly once — and if — the 75% threshold is notified. If your company is facing an ROC notice for a procedural default, the eventual transition and savings provisions in the Bill's commencement clauses will decide whether that matter is covered by decriminalisation; this is a determination for a qualified Chartered Accountant or Company Secretary to make against the final notified text, not something to assume in advance. I'm CA Harun Raaj, Visakhapatnam. If your company's CSR position, a pending merger, or an ROC notice touches any of these proposed changes, get in touch and we'll map your current obligations while this Bill makes its way through Parliament. --- ## See Also - [One audit a year isn't enough: Section 129 vs bank MIS](https://www.harunraaj.com/blog/section-129-annual-audit-vs-bank-management-accounts) Canonical: https://www.harunraaj.com/blog/corporate-laws-amendment-bill-2026-india-inc