- Parliamentary panel has submitted its report on the Corporate Laws (Amendment) Bill, 2026, recommending adoption with clause-wise modifications aimed at simplifying compliance and strengthening corporate governance.
- The report includes 169 recommendations and supports the government's move to further empower the National Financial Reporting Authority (NFRA) with certain checks.
- The committee's recommendations aim to ease compliance for businesses while improving investor protection and regulatory oversight through targeted amendments to the Companies Act, 2013 and the Limited Liability Partnership (LLP) Act, 2008.
- The committee held 25 sittings and heard 83 experts before finalizing its report, which runs over 1,100 pages.
- The Corporate Laws (Amendment) Bill, 2026 was introduced by Finance Minister Nirmala Sitharaman in Lok Sabha on March 23 and referred to the Joint Committee.
- The committee's report includes provisions for decriminalising procedural defaults by replacing criminal provisions with civil penalties and relaxations under the Corporate Social Responsibility (CSR) framework.
- The committee has recommended fixed penalties for non-compliance and suggested that exemption from mandatory statutory audit be allowed only for small businesses.
A parliamentary panel has submitted a comprehensive report on the Corporate Laws Amendment Bill, 2026, recommending significant reforms to enhance corporate governance and simplify compliance.1
The Joint Committee, chaired by BJP MP Sudheer Gupta, presented its findings after extensive consultations with various stakeholders, including government departments and industry experts.
The report includes 169 recommendations aimed at empowering the National Financial Reporting Authority (NFRA) while ensuring it does not overlap with the functions of the Institute of Chartered Accountants of India (ICAI). The committee expressed concerns that expanded NFRA powers could lead to regulatory duplication and increased compliance burdens.23
To address these issues, the committee suggested that the legislative framework should allow for a harmonious coexistence between NFRA and ICAI, focusing NFRA's role strictly on corporate financial oversight.
Among the key proposals are measures to decriminalise procedural defaults by replacing criminal penalties with civil fines, and allowing specified trusts to convert into limited liability partnerships (LLPs). The committee also recommended a fixed penalty of ₹50,000 for certain non-compliances, and modifications to the Corporate Social Responsibility (CSR) framework to permit in-kind contributions for small companies.
The report, which spans over 1,100 pages, aims to improve the ease of doing business in India by streamlining regulatory processes and enhancing investor protection. The government is expected to rework the Bill based on these recommendations before seeking Cabinet approval.456
“The report, running over 1,100 pages, emerged from 25 sittings, 130 stakeholder memoranda and 83 expert hearings. Its proposals include a fixed ₹50,000 penalty for certain non-compliances and allowing in-kind CSR contributions for small companies, alongside dissent notes from two panel members.”
Deccan Chronicle
CNBC TV18
