Corporate Law Amendment Bill: Key Changes In CSR Norms, Fundraising Rules And Other Provisions

On Monday, the finance minister Nirmala Sitharaman presented the Corporate Law (Amendment) Bill, 2026, in Lok Sabha, which suggested a set of changes to facilitate compliance and reduce criminal penalties for corporate infractions. The bill aims at revising the Companies Act, 2013, and the Limited Liability Partnership Act, 2008, and has been sent to a joint committee to be further reviewed.

What Are The Key Provisions Introduced?

The key provisions introduced are as follows:

1. Physical Annual General Meeting (AGM)

The amendment proposed aims to make the rules that surround annual general meetings (AGMs) easier. Presently, a physical AGM must be held by the companies once a year.

Within the new proposal, it is possible that the companies are permitted to hold a physical AGM at least once every three years, which would minimise the administrative load and provide increased flexibility in the interaction with the shareholders.

2. Small Company Limit

The bill expands the definition of small companies to bring more firms under a lighter compliance framework. The minimum paid-up capital requirement jumped from ₹10 crore to ₹20 crore. Simultaneously, the turnover threshold saw a rise, moving from ₹100 crore to ₹200 crore.

This move is expected to extend regulatory relaxations to a larger set of companies, particularly smaller and mid-sized businesses.

3. CSR Norms And Regulations

The amendment suggests alterations in the corporate social responsibility (CSR) regulations as well. Currently, firms that have profits of ₹5 crore and above will have to utilise the 2 per cent average profit on CSR activities.

The bill has the suggestion of raising this profit threshold to ₹10 crore to decrease the number of companies subject to mandatory CSR.

4. Decriminalised Fundraising

Currently, fundraising offences under the Companies Act can attract imprisonment for up to 10 years. Under the proposed bill, prospectus-related offences will instead incur a penalty of ₹2 lakh.

5. Other Provisions

The bill also incorporates various provisions to enhance governance and ease of doing business.

It permits shareholders to participate digitally, permits companies to issue share capital in foreign currency at International Financial Services Centres (IFSCs) and increases the authority of the National Financial Reporting Authority (NFRA) to enhance audit supervision.

It also suggests the changes in the director identification structure to increase the standard of corporate governance.

Also Read - India Liquidity Hits First 2026 Deficit As GST And Advance Tax Payments Surge

What Does This Mean For Investors?

To investors, the bill is a strong indication of an impending change towards a more business-friendly and more compliance-friendly regulatory system. The reduction of compliance load and decriminalisation of some offences would enhance operational flexibility and the efficiency of raising capital, especially by smaller businesses.

At the same time, stronger audit oversight ensures that governance standards are maintained. The net effect should bolster corporate endeavours, facilitate fundraising efforts, and boost investor trust. This is particularly true as India's capital markets evolve and mature.

Sources:

NDTV Profit TV

News Indian Express