INTRODUCTION
The Corporate Laws (Amendment) Bill, 2026 was introduced in Lok Sabha on March 23, 2026.1 It seeks to amend the Companies Act, 2013 and the Limited Liability Partnership (LLP) Act, 2008. The importance of this bill lies on it’s procedural benefit that it ushers towards the company namely reduction of significant time, energy and complexity that would otherwise result in hectic procedure. The bill has taken a lot of references from the advancements suggested in the Report of the Expert Committee on Company Law (J.J. Irani Committee Report, 2005), 2that proposed the framework for conceptual groundwork for India’s modernised corporate law framework.
The major amendments that will be dealt within this article shall include Sections 230–233 (NCLT-sanctioned schemes and fast-track schemes), Section 68 (buy-back of shares) and the newly introduced Section 233A 3(treasury shares) of the Act, placing each amendment in the context of existing law, and its likely impact on M&A practice. This article deals with the Companies Act, 2013 & Limited Liability Partnership Act, 2008 and aims to allow the board to focus on substantive governance and growth rather than procedural lapses. The companies Act,2013 deals with laws and governance that a company must abide by and the LLP Act refers to the Limited Liability Partnership Act,2008, which governs the formation, regulation, and functioning of Limited Liability Partnerships in India. The need of this reform was to fast track substantive delays caused by (NCLT, multi-bench issue), Criminalisation of minor defaults & the Overlap with Insolvency and Bankruptcy Code, 2016.
This article frames the amendment to improvise the layers that are present in a M&A transaction and deal structuring and has been a division between Pre-deal stage (Due diligence), Deal Execution stage, Approval & structural stage, Post-merger integration & Exit strategies.
PRE-DEAL STAGE(DUE-DILIGENCE)
DECRIMINALISATION: The proposed bill aims to decriminalize minor offences and classify them into civil liabilities that can be cut down by paying fees as compared to criminal liability that requires procedural task4. The Bill decriminalises several offences under the two Acts. It imposes civil penalty for such offences instead of imprisonment or fine. These include: (i) wilful failure to furnish information related to the affairs of a producer company, (ii) contravention of Rules, (iii) Clause 7, 25(2) failure to furnish information or document required by the Registrar, (iv) violation of requirements on books of account, and (v) 38(4) failure to comply with a requisition (other than summons) of the Registrar.
CSR POLICIES: Clause 43 of the Bill seeks to amend sub-section (1) of section 135 of the Companies Act5 and has refined the metrics for companies to classify under the CSR policy, PRE- AMENDMENT, the threshold for a company to classify under the CSR policy was an annual turnover of Rs 1,000 crore or more, net worth of Rs.500 Crore or more and the the net profit of Rs 5 Crore of more, the companies who fell into the definition were required to contribute at least two percent of their average net profit in the last three years towards CSR Policy. However, the new amendment bill has proposed to shift the threshold upwards to accommodate to companies who have the annual net profit of Rs.10 Crore. This implies a general advantage towards companies with lesser profit to exempt CSR policies and hence will benefit the involved stakeholders of the company.
SMALL COMPANIES: The clause also seeks to amend sub-clauses (i) and (ii) of clause (85) to expand the definition of small companies by increasing the existing upper limit of paid-up share capital to twenty crore rupees and existing upper limit of turnover to two hundred crore rupees as compared to the previous bill that had a limit of paid-up share capital to ten crore rupees and of turnover to one hundred crore rupees6.
The following amendments will allow companies to have less rigid compliance and regulatory test and collectively enhance the ease of conducting due diligence, improve the quality and reliability of target companies, and accelerate transaction timelines. The overall legislative intent clearly favours speed, flexibility, and commercial practicality, positioning Indian corporate law as a more facilitative regime for both domestic and cross-border M&A transactions.
DEAL EXECUTION STAGE
LIMITED LIABILITY PARTNERSHIP ACT, 2008:
The Limited Liability Partnership Act, 20087 establishes LLPs in India as a hybrid business structure combining the flexibility of partnerships with the limited liability of companies. Existing provision: Section 58 permitted conversion only from a firm, private company, or unlisted public company into an LLP8. Trusts were excluded, the new amendment incudes Trust into it’s definition. According to Section 3 of Indian trust Act,1882, trust is defined as an obligation annexed to the ownership of the property, arising out of confidence reposed in, accepted by the owner, or declared and accepted by him, for the benefits of another or of another and the owner.9
Clause 3 relaxes incorporation requirements by mandating professional declarations only where such professionals are actually engaged, thereby reducing procedural burden and costs. It also enables LLPs in International Financial Services Centres to undertake financial services activities in line with the International Financial Services Centres Authority Act, 2019.10
Clause 7 of the Bill seeks to insert a new proviso to sub-section (2) of section 25 of the LLP Act, 2008 11 so as to provide that in case of prescribed class or classes of LLPs regulated by SEBI or by the IFSCA, the requirement to furnish details of changes in partners to the Registrar shall be on annual basis in such form and manner as may be provided by rules. This amendment is to facilitate setting up of Alternative Investment Funds in LLP form. Further, Clause 8 mandates that LLPs operating in IFSCs account for and disclose partner contributions in permitted foreign currency, and requires existing LLPs to transition to such currency frameworks, thereby aligning them with global financial practices and facilitating foreign investment. Taken together, these amendments reduce regulatory friction, enhance operational flexibility, and make LLPs more viable and attractive for sophisticated financial activities and M&A structuring.
Clause 2 of the Bill seeks to amend sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (hereinafter referred to as the LLP Act, 2008) by inserting new definitions for the terms “International Financial Services Centre”, “International Financial Services Centres Authority”, “permitted foreign currency” and “Specified International Financial Services Centre LLP” in the LLP Act, 2008. It facilitates companies and LLPs operating in IFSC by rendering them permission to issue and maintain share capital in foreign currency as permitted by the International Financial Services Centres Authority. This significantly enhances cross-border deal structuring flexibility, reduces currency-related transaction constraints, and positions such entities as more viable vehicles for international M&A and investment transactions.
Conversion of an LLP into a company is primarily governed by Section 366 of the Companies Act, 201312, read with the relevant rules, rather than a specific provision under the LLP Act. This amendment will also enhance operational flexibility as it allows smooth transition for a LLP into a company and allow them to meet investor requirements or regulatory compliance and vice versa. Companies can restructure before M&A transactions. LLPs can be converted into companies to: Issue shares , Attract investors & Facilitate acquisitions.
Section 230(1) of the Companies Act, 2013, read with the Insolvency and Bankruptcy Code, 2016, clarifies the applicable framework for restructuring. The amendment seeks to eliminate overlap by ensuring that companies undergoing insolvency proceedings cannot simultaneously pursue schemes under the Companies Act, thereby preventing parallel remedies and forum shopping. 13
APPROVAL AND STRUCTURAL STAGE
APPROVAL STAGE:
(A) JURISDICTIONAL BENCH: Applications for schemes under Sections 230 to 233 14includes one NCLT Bench for the handling of the scheme and the prescribed bench is the one that has jurisdiction over the: Transferee company (the company taking over), or Resultant company (in demergers) That single bench will Handle all companies involved in the scheme and Exercise full powers under Sections 230–233. The ongoing cases shall not be impacted. This will impact largely the companies because the earlier provisions required to file a NCLT claim in it’s own jurisdiction (Bombay NCLT, DELHI NCLT) Which resulted in delays in results and often contradictory results from different benches which lead to extreme time gaps.
(B) The following Section 233 1(d) provides the relief from the otherwise threshold of approval from the majority that is 90% of total number of members and creditors which is now amended to 75%i.e, objections and suggestions received are considered by the companies in their respective general meetings and the scheme is approved by a majority of members or class of members present and voting at the meeting who hold at least seventy-five per cent. 15This amendment seeks to aligns the approval requirements for such schemes with those applicable to schemes placed for sanction before the Tribunal under section 230. This has significantly Reduced minority veto power& Increased promoter control in M&A .
STRUCTURAL STAGE:
(A) Treasury share : Insertion of Section 233A requires the transferee company to disposes of any held share in its own name or any trust, before the commencement of companies act 2013 within a period not exceeding three years from the date of commencement of the Corporate Laws (Amendment) Act, 2026. Any default in the defined mechanism shall result in cancellation and extinguishment by the company in such manner, as may be prescribed, and such cancellation and extinguishment shall be deemed to be a reduction of the share capital of the company. 16
(B) Valuation Regulation: The bill proposes an amendment in section 247 of the principal Act by mandating the Insolvency and Bankruptcy Board of India (U/188) of the Insolvency and Bankruptcy Code, 2016 shall be the Valuation Authority for the purposes of this section. 17They shall grant certificates, monitor and enforce compliance and oversee managerial affairs. The earlier provision stated “it shall be valued by a person having such qualifications and experience, registered as a valuer and being a member of an organisation recognised, in such manner, on such terms and conditions as may be prescribed and appointed by the audit committee or in its absence by the Board of Directors of that company”, has effectively proposed to be amended.
POST-MERGER INTEGRATION & EXIT STRATEGIES
TREASURY SHARES: The Corporate Laws (Amendment) Bill, 2026 introduces a new Section 233Ato the Companies Act, 2013 dealing with treasury shares. Treasury shares refer to shares which are bought back by a company and held by it instead of being immediately extinguished. Under the existing framework of Section 68 of the Companies Act, 2013,18 shares bought back by a company are required to be extinguished and physically destroyed within the prescribed time. The proposed amendment departs from this traditional approach by permitting companies, under prescribed conditions, to hold such shares in treasury.
This amendment carries significant implications for post-merger integration. In M&A transactions, acquiring companies often require flexibility in restructuring capital, rewarding employees, consolidating promoter holdings, or facilitating future strategic investments. Treasury shares can operate as an efficient corporate finance mechanism because they may later be reissued for employee stock option plans, merger consideration, strategic partnerships, or future acquisitions without undergoing fresh issuance procedures. This reduces transactional costs and improves integration efficiency after the merger is completed.
The amendment also aligns Indian corporate practice with several international jurisdictions such as the United States and Singapore, where treasury shares are commonly used as instruments for capital restructuring and post-acquisition financial management. From an integration perspective, it provides companies with greater liquidity management, improved balance-sheet restructuring options, and flexibility in maintaining market stability after large-scale acquisitions.
BUY-BACK OF SHARES: Clause relating to Section 68 of the Companies Act, 2013 also streamlines the framework governing buy-back of shares.19 Buy-backs are frequently utilised in post-merger restructuring to eliminate minority holdings, consolidate ownership, improve earnings per share, and optimise capital structure. The amendment simplifies procedural requirements and strengthens the ability of companies to undertake strategic buy-backs in a commercially viable manner.
In the context of post-merger integration, buy-back mechanisms may assist companies in removing fractional shareholdings created during amalgamations, reducing hostile shareholder interference, and enabling smoother operational consolidation. It also permits acquiring entities to restructure equity more efficiently after the completion of mergers or acquisitions. Such restructuring mechanisms are particularly relevant in private equity exits, promoter consolidation strategies, and cross-border acquisitions where capital rationalisation becomes essential after integration.
EXIT STRATEGIES: The amendments collectively improve exit opportunities for investors, promoters, and acquiring entities. Faster approvals under Sections 230–233, reduced compliance burdens, decriminalisation of procedural defaults, and flexibility in treasury share management together create a more investor-friendly exit ecosystem.20 Investors in mergers and acquisitions generally seek certainty regarding liquidity events, restructuring rights, and capital withdrawal mechanisms. The Bill substantially enhances such certainty.
The reduction in regulatory delays before the NCLT, combined with simplified structural approvals, enables quicker implementation of schemes involving demergers, reverse mergers, reconstruction, and strategic exits. Furthermore, by reducing procedural overlap with the Insolvency and Bankruptcy Code, 2016, the amendment ensures that companies do not misuse parallel proceedings, thereby increasing transactional certainty for creditors and investors.
From a commercial perspective, the reforms encourage foreign investment and private equity participation because they improve predictability in entry and exit planning. Efficient post-merger restructuring mechanisms, treasury share flexibility, and simplified buy-back procedures collectively position India as a more competitive and commercially adaptable jurisdiction for complex M&A transactions and corporate reorganisations.
Notes:
1 The Corporate Laws (Amendment) Bill, 2026, Bill No. 85 of 2026, Lok Sabha (India).
2 J.J. Irani Expert Comm., Report on Company Law 12–15 (2005).
3 Companies Act, No. 18 of 2013, §§ 68, 230–233A (India).
4 The Corporate Laws (Amendment) Bill, 2026, cls. 7, 25, 38.
5 Companies Act, No. 18 of 2013, § 135 (India).
6 Companies Act, No. 18 of 2013, § 2(85) (India).
7 Limited Liability Partnership Act, No. 6 of 2009 (India).
8 Limited Liability Partnership Act, No. 6 of 2009, § 58 (India).
9 Indian Trusts Act, No. 2 of 1882, § 3 (India).
10 International Financial Services Centres Authority Act, No. 50 of 2019 (India).
11 Limited Liability Partnership Act, No. 6 of 2009, § 25 (India).
12 Companies Act, No. 18 of 2013, § 366 (India).
13 Companies Act, No. 18 of 2013, § 230(1) (India); Insolvency and Bankruptcy Code, No. 31 of 2016 (India).
14 Companies Act, No. 18 of 2013, §§ 230–233 (India).
15 Companies Act, No. 18 of 2013, § 233(1)(d) (India).
16 The Corporate Laws (Amendment) Bill, 2026, proposed § 233A.
17 Companies Act, No. 18 of 2013, § 247 (India).
18 Companies Act, No. 18 of 2013, § 68 (India).
19 Companies Act, No. 18 of 2013, § 68 (India).
20 Companies Act, No. 18 of 2013, §§ 230–233 (India).
Author Bio
