Corporate Laws (Amendment) Bill, 2026: Major Company Law Reforms Set to Reshape Mergers, Compliance and Governance

In a significant step toward modernizing India’s corporate regulatory framework, the Union Government introduced the Corporate Laws (Amendment) Bill, 2026 in the Lok Sabha on March 23, 2026. The Bill proposes extensive amendments to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008, with a focus on ease of doing business, governance reforms, decriminalization of technical defaults, and stronger regulatory oversight. It has since been referred to a Joint Parliamentary Committee (JPC) for further scrutiny.

One of the most notable proposals is the expansion of the definition of “small company” under Section 2(85). The paid-up capital threshold is proposed to increase from ₹10 crore to ₹20 crore, while the turnover threshold may rise from ₹100 crore to ₹200 crore. This would allow a larger number of companies to access simplified compliance norms available to small companies. 

The Bill also proposes major changes to fast-track mergers under Section 233. Approval thresholds for shareholders and creditors are proposed to be reduced, making mergers between eligible entities such as small companies and holding-subsidiary companies faster and more commercially practical. This is expected to significantly reduce dependence on lengthy NCLT processes. 

Another key reform concerns share buy-backs under Section 68. The Bill enables prescribed classes of companies to undertake buy-backs up to a notified percentage, offering greater flexibility in capital restructuring and shareholder returns. 

The proposed amendments further continue the policy of decriminalizing procedural lapses, replacing imprisonment or criminal penalties in several cases with civil penalties and adjudication mechanisms. This reflects a broader shift from punitive regulation to compliance-based enforcement.

Importantly, the Bill seeks to strengthen the powers of the National Financial Reporting Authority (NFRA), signalling tougher standards for auditors, valuation professionals, and financial governance. 

For lawyers, company secretaries, insolvency professionals, and M&A practitioners, the Bill is highly consequential. If enacted, it could reshape corporate transactions, boardroom accountability, restructuring strategy, and regulatory compliance marking one of India’s most important business law reform packages in recent years.