If you picked up the 39-page bill text from Parliament's website and made it halfway through before giving up, you're not alone. The Corporate Laws (Amendment) Bill, 2026 — introduced as Bill No. 85 of 2026 in Lok Sabha — is dense, cross-referential, and written like every amendment bill ever written. But what's actually inside it matters to anyone running a company, advising one, or sitting on its board. This article breaks it down the way it should have been explained from the start.
The bill amends two statutes simultaneously: the Limited Liability Partnership Act, 2008 and the Companies Act, 2013. The changes range from how GIFT City entities operate, to how NFRA gets funded, to whether your company needs to hold a physical AGM every single year. Here's what the Corporate Laws Amendment Bill 2026 actually does, section by section.
Most of the bill's weight falls on the Companies Act. And most companies will feel it in places they didn't expect — not in headline-grabbing governance changes, but in the fine print of board meetings, director IDs, buy-backs, and penalties.
Section 96 gets a new sub-section (3). Companies can now hold their annual general meeting physically, through video conferencing, or in a hybrid format combining both. Previously, the hybrid option existed only through MCA circulars — which had a habit of expiring and getting renewed awkwardly. This codifies it.
But there's a guardrail: every company must hold at least one physical AGM every three years. So hybrid is the new normal, but it can't permanently replace in-person meetings. And if members holding the requisite percentage of shares ask for a hybrid format, the company is legally bound to provide it. That's a shift of power toward minority shareholders that most companies haven't fully absorbed yet.
Section 154 is almost entirely rewritten. Until now, a Director Identification Number was essentially forever once allotted. Under the amended version, a DIN can be deactivated or cancelled — not just by non-compliance, but also when a director has incurred disqualification under Section 164 in one or more companies.
And once cancelled, the directorial office becomes vacant automatically. No Tribunal order needed. No separate process. The DIN cancellation itself triggers the vacancy.
There's also a new obligation: directors must periodically verify their particulars with the Central Government. Details of the interval and form are left to rules, but the obligation now exists in the statute itself. If you haven't updated your DIN details in years, this is worth paying attention to.
Section 164 adds two new grounds of disqualification. First, if you've been an auditor, secretarial auditor, cost auditor, registered valuer, or insolvency professional of the company or any of its related companies in the immediately preceding three financial years, you cannot be appointed as a director. That's not new in spirit — but spelling it out with specificity in the statute is new.
Second — and this one is genuinely significant — a person who is not assessed by the Board as "fit and proper" can be disqualified. The criteria are to be prescribed by rules, and different criteria can apply to different classes of companies. That last part is the interesting bit. It signals that the Ministry intends to set higher bars for directors of certain regulated or listed entities without triggering disruption across the full corporate universe.
The amendments to the LLP Act are heavily focused on one thing: aligning GIFT City LLPs with international financial centre norms. A new category called the "Specified International Financial Services Centre LLP" runs through almost every amended section.
These LLPs must maintain their partner contributions, books of account, and financial statements in a "permitted foreign currency" specified by IFSCA. Their name must carry the suffix "International Financial Services Centre LLP." Their registered office must stay within the IFSC at all times. And their fee filings and penalties must still be paid in Indian rupees — a nuance that will catch some entities off guard.
For LLPs already operating in GIFT City in rupees, there's a conversion window. But after that window closes, accepting any new partner contribution without converting to a permitted foreign currency will be prohibited. The transitional window's exact duration will be specified by IFSCA regulations, so watch that space.
One of the least-discussed but potentially impactful changes in the bill is the insertion of a new Fifth Schedule and Section 57A into the LLP Act. For the first time, a "specified trust" — meaning a trust established under the Indian Trusts Act or a Central/State Act and registered with SEBI or IFSCA — can convert into a limited liability partnership.
Here's the catch: only the trustees of that trust can become partners of the new LLP. No one else. And you need consent from three-fourths of the investors before the conversion can proceed. This is specifically designed for SEBI-registered or IFSCA-regulated investment funds structured as trusts — Category I and II AIFs, for instance — that may want the operational flexibility of an LLP structure without triggering a full dissolution and fresh incorporation. For fund managers exploring this path, the window is finally open.
Until now, NFRA's authority felt incomplete. It could investigate and impose penalties, but its institutional scaffolding was thin. The 2026 amendments are the most significant expansion of NFRA's powers since its establishment.
Section 132B is newly inserted. NFRA now has its own dedicated fund — the National Financial Reporting Authority Fund — fed by Central Government grants, fees collected by the authority, and other approved sources. This isn't just administrative housekeeping. An independent fund means NFRA can plan staffing, engage experts, and invest in technology without waiting for annual budget allocations. That changes how the institution will operate in practice.
Section 132A, also freshly inserted, requires every auditor of a NFRA-regulated company to register with NFRA and file periodic returns. Failure to register or file carries a penalty starting at ₹25,000 and running up to ₹25 lakh. Furnishing false information can cost up to ₹50 lakh.
More than the numbers, this creates a direct compliance relationship between individual auditors and NFRA — something that previously didn't exist in the statute. NFRA can now issue directions to auditors directly (Section 132C), and non-compliance invites penalties up to ₹1 crore for audit firms. Civil courts are explicitly barred from interfering in NFRA matters.
Honestly, this part of the bill is the one that audit firms should be reading most carefully. The combination of mandatory registration, mandatory returns, and NFRA's new power to issue binding directions is a structural change in how auditors of listed and large companies will be regulated.
Section 247 of the Companies Act is almost entirely rewritten. And the biggest change isn't what most people are discussing.
The IBBI — Insolvency and Bankruptcy Board of India — is formally designated as the Valuation Authority for all valuations under the Companies Act. Previously, this role was scattered across MCA rules and the Insolvency Professional Agency framework. Now it has a statutory anchor.
The IBBI as Valuation Authority will grant and renew certificates to both valuers' organisations and individual registered valuers. It will set qualification standards by regulation. It will monitor compliance. It will impose penalties — up to ₹10 lakh for individual registered valuers, up to ₹1 crore for recognised valuers' organisations. And fraudulent valuations now carry criminal penalties: up to one year imprisonment plus a fine tied to eight times the valuer's remuneration.
One change that's easy to miss: LLPs regulated by SEBI or IFSCA now get modified filing obligations. Changes to LLP agreements and partner details don't need to be filed immediately — they can be disclosed annually. For fund structures where partnership compositions change frequently, this reduces operational friction significantly.
There's a pattern to how companies respond to amendment bills. They read the headline changes, brief their boards on two or three items, and assume the rest doesn't apply. The 2026 bill has a few landmines in that overlooked category.
The CSR threshold change is one. Section 135 raises the net profit threshold for CSR applicability from ₹5 crore to ₹10 crore — or "such sum as may be prescribed." That phrase matters. It means the government can revise this threshold downward later without another amendment. Don't restructure your CSR programme purely on the ₹10 crore number.
The AGM hybrid requirement isn't free either. To hold a hybrid AGM, companies must comply with prescribed terms and conditions — which haven't been notified yet. Setting up proper audiovisual infrastructure and maintaining records of remote participation is a compliance obligation, not just a convenience.
And the buy-back amendments — specifically the allowance for two buy-backs within a year for certain prescribed classes of companies — come with a six-month gap requirement between them. Miss that gap on the second buy-back and the entire transaction is exposed to challenge.
Most guides on this bill skip the penalty decriminalisation angle entirely, but it matters. Dozens of offences across the Companies Act have been converted from criminal penalties (fine or imprisonment) to civil penalties (adjudication-based). This is broadly positive — it reduces the threat of prosecution for technical defaults. But it also means adjudication officers will face higher volumes of cases. If you were relying on prosecution being unlikely as a reason not to fix a long-standing default, the calculus has shifted.
There is a conversion window — the exact timeline will be specified by IFSCA in consultation with the Central Government. But after that window closes, any Specified IFSC LLP cannot accept new partner contributions without converting its existing capital to a permitted foreign currency. Existing accounts can stay in rupees only if IFSCA explicitly permits it. The safest move is to monitor IFSCA's regulations actively once the bill is notified.
No. Section 96 now requires at least one physical AGM every three years. For most companies that means you can go hybrid for two consecutive years but must hold an in-person meeting in the third. There is also a provision that if the requisite members ask for a hybrid format, the company must accommodate it — so even your mandatory physical meeting may need to support hybrid participation.
The bill inserts the requirement in Section 164(1)(k) but leaves the criteria itself to be prescribed by rules. Different criteria can apply to different company classes. Until those rules are notified, companies should document their internal board evaluation processes carefully — because when the rules land, companies will need to show how they assessed each director's fit and proper status before appointment or continuation.
Section 454 has been amended to address exactly this. The Central Government will notify a scheme for the withdrawal of existing complaints and the transfer of matters to adjudication under Section 454. Once that scheme is published, companies with pending prosecutions for now-decriminalised offences should review whether they qualify for transfer to the adjudication route.
Technically yes, if the trust is registered with SEBI or IFSCA and qualifies as a "specified trust" under Section 57A. But three-fourths of investors must consent, and only existing trustees can become partners of the resulting LLP. Investors themselves cannot become partners unless they are also trustees. For most AIFs, this limits the practical use of the conversion route — but for certain co-investment vehicles and smaller fund structures, it could be genuinely useful.
The Corporate Laws Amendment Bill 2026 creates multiple obligations that kick in only once rules, regulations, and notification dates are specified. That's not an excuse to wait. The companies that handle these transitions cleanly are the ones that started preparing before the secondary legislation dropped.
For listed companies and large unlisted companies, NFRA's new reach is the most immediate concern — specifically the auditor registration requirement under Section 132A. Your audit firm will need to register. Set a reminder to confirm that they have.
For GIFT City entities, track IFSCA regulations closely. The foreign currency conversion window has a hard deadline once set.
For boards evaluating director appointments, begin documenting your fit-and-proper assessment process now — even informally — so the transition is smooth when the criteria are finally prescribed.
The bill hasn't been notified as law yet. Different provisions may come into force on different dates. That's deliberate — it gives companies time to adjust. Use that time.
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