The Corporate Laws (Amendment) Bill, 2026 proposes extensive amendments to the Limited Liability Partnership Act, 2008 and the Companies Act, 2013 with the objective of updating regulatory frameworks, improving compliance mechanisms, and aligning corporate practices with evolving financial and regulatory environments. The Bill provides for its commencement on dates notified by the Central Government, allowing phased implementation of its provisions.
A significant focus of the amendments relates to entities operating within International Financial Services Centres (IFSCs). New definitions such as “International Financial Services Centre,” “International Financial Services Centres Authority,” and “permitted foreign currency” are introduced. The concept of a “Specified International Financial Services Centre LLP” is also incorporated, bringing such LLPs under a specialized regulatory framework. These LLPs are required to maintain their registered office within an IFSC and include a specific suffix in their name.
The Bill introduces provisions allowing LLPs in IFSCs to maintain accounts, contributions, and financial records in permitted foreign currencies. It also enables conversion of existing contributions from Indian rupees to foreign currency within a prescribed framework. Further, valuation provisions under the Companies Act are extended to LLPs, and compliance requirements for filing and disclosures are modified for entities regulated by authorities such as SEBI and IFSCA.
A notable structural reform is the introduction of provisions allowing conversion of specified trusts into LLPs. The Bill outlines eligibility conditions, procedural requirements, and legal consequences of such conversion. Upon registration, all assets, liabilities, rights, and obligations of the trust vest in the LLP, and the trust is deemed dissolved. Existing agreements, proceedings, and employment arrangements continue in the LLP, ensuring continuity of operations.
In relation to the Companies Act, the Bill introduces several definitional and procedural changes. Thresholds for classification of certain companies are revised, and provisions are introduced to allow realignment of financial years under specified conditions. New compliance requirements mandate certain classes of companies to maintain websites, email addresses, and electronic communication systems, with mandatory reporting of such details to the Registrar.
The Bill emphasizes digitization by mandating electronic service of documents in prescribed cases and enabling companies to conduct general meetings through physical, virtual, or hybrid modes. It also introduces flexibility in calling meetings through electronic means with reduced notice periods in certain cases.
For companies incorporated in IFSCs, the Bill requires issuance and maintenance of share capital in permitted foreign currency, along with maintenance of financial records in such currency. However, fees, fines, and penalties remain payable in Indian rupees.
The amendments also strengthen the role and powers of the National Financial Reporting Authority (NFRA). It is granted corporate status, expanded enforcement powers, and authority to issue directions, conduct inquiries, impose penalties, and regulate auditors. Provisions are introduced for mandatory registration and reporting by auditors, along with penalties for non-compliance or furnishing false information. The Bill also provides for the establishment of a dedicated fund for NFRA and mechanisms for appeal against its orders.
Further, the Bill enhances penalty frameworks across various provisions, replacing certain fines with structured penalties and increasing penalty amounts for non-compliance. It also introduces provisions for adjudication of penalties and appeal mechanisms.
Corporate governance measures are strengthened through requirements for additional disclosures in board reports, including explanations for audit observations and details regarding audit committee recommendations. Changes are also made to provisions relating to CSR thresholds, auditor appointments, independence requirements, and restrictions on non-audit services.
Overall, the Bill reflects a shift towards greater regulatory clarity, digitization, stricter enforcement, and facilitation of global financial operations, particularly through IFSC frameworks, while ensuring continuity, transparency, and accountability in corporate structures.
TO BE INTRODUCED IN LOK SABHA
Bill No. 85 of 2026
THE CORPORATE LAWS (AMENDMENT) BILL, 2026
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BILL
