India's corporate regulatory landscape is poised for a significant transformation following the 2026 Budget Session of Parliament. The session, which commenced on Wednesday, January 28,2026, and concluded with both Houses adjourning sine die on Saturday, April 18, 2026, may prove to be highly consequential for the business sector. Notably, it saw the introduction of Corporate Laws (Amendment) Bill, 2026 (“Bill”), in theLok Sabha. The Bill seeks to amend key legislations, including the Companies Act, 2013 (“Act”) and the Limited Liability Partnership Act, 2008. To ensure detailed scrutiny of its sweeping provisions, the Bill has currently been referred to a Joint Committee of both Houses. The bill contains several reforms, of which a few are highlighted below.

Decriminalisation of Minor Offences

A key feature of the Bill is the decriminalisation of minor and technical offences. Under the earlier framework,even procedural lapses such as delays in filings could result in criminal liability, including imprisonment. The Bill proposes to replace such penalties with monetary fines, thereby reducing the compliance burden and legal risks faced by businesses.

Modernisation of Corporate Governance

The Bill allows companies to conduct Annual General Meetings (AGMs) and Extraordinary General Meetings(EGMs) through video conferencing but mandates that at least one physical AGM be held every three years. These changes are likely to improve shareholder participation and reduce logistical challenges.

Financial Flexibility and CSR Reforms

The Bill introduces greater financial flexibility for companies by allowing multiple share buybacks within a financial year whereas under the Act it says no offer of buy back under this sub section shall be made within a period of one year reckoned from the date of the closure of the preceding offer of buy back, if any. It also extends compliance timelines, particularly by increasing the time for transferring unspent Corporate Social Responsibility (CSR) funds for ongoing projects from30 days to 90 days. Additionally, it proposes raising the CSR applicability threshold by increasing the net profit requirement from ₹5 crore to ₹10 crore.

Audit Exemption

Another significant proposal is the empowerment of the Central Government to exempt certain classes of companies from mandatory statutory audits. This measure is aimed at easing compliance for smaller companies.

Expansion of Small Company Definition

The eligibility threshold for classification as a small company is proposed to be increased to a paid-up capital limit of ₹20 crore and a turnover limit of ₹200 crore from the existing paid-up capital limit of ₹10 crore and turnover of ₹100 crore. This change will allow more companies to benefit from reduced compliance requirements.

Additionally, the Bill strengthens regulatory oversight by enhancing the powers of the National Financial Reporting Authority (NFRA) and introduces reforms for LLPs, including simplified compliance and new restructuring and conversion mechanisms.

Stock Appreciation Rights

The Bill proposes crucial amendments to Section 42(2) and Section 62(1)(b) of the Act to officially recognise restricted stock units (RSUs) and stock appreciation rights (SARs) alongside traditional employee stock option plans (ESOPs).

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