The finance minister is scheduled to introduce the Corporate Laws (Amendment) Bill, 2026 “to amend” the Limited Liability Partnership (LLP) Act.
Union finance minister Nirmala Sitharaman is set to introduce a bill to amend corporate laws in the Lok Sabha on Monday for further ease of doing business, decriminalise minor offences, replace certain criminal provisions with civil penalties and reduce compliance burdens for small firms, startups and produce companies set up by farmers.
According to the Lok Sabha’s agenda for Monday, the finance minister is scheduled to introduce the Corporate Laws (Amendment) Bill, 2026 “to amend” the Limited Liability Partnership (LLP) Act, 2008 and the Companies Act, 2013. While the Company Act deals with incorporation, governance, disclosures and dissolution of a firm, more flexible LLP Act provides limited liabilities for partners, people aware of the development said, requesting anonymity. The cabinet cleared the bill on March 10.
Both laws had been amended in the past and current amendments are aimed at not only to further ease of doing business but also to introduce ease of living for corporates by decriminalising more provisions, the people said. The Company Act was earlier amended four times since 2015 to rationalise compliance requirements. The LLP Act was earlier emended in 2021 with similar objectives.
“The bill is expected to propose several changes for ease of compliance, including decriminalisation of several provisions, regulatory ease for small firms, startups and producer companies,” one person said. A producer company is incorporated by people involved in activities such as agriculture, fishery, animal husbandry, horticulture, floriculture, pisciculture, forestry and forest products.
The amendments in the laws are made on the basis of the Company Law Committee (CLC) constituted by the government to facilitate greater ease of doing business for business entities. The CLC has submitted its last report to the government on March 21, 2022. An 11-member CLC was constituted in September 2019. Its members included former Lok Sabha secretary general TK Viswanathan, Kotak Mahindra Bank managing director Uday Kotak, Shardul Amarchand Mangaldas & Co executive chairman Shardul S Shroff, chartered accountant G Ramaswamy, and Xpro India chairman Sidharth Birla.
With regard to the Companies Act, 2013, some recommendations of the CLC included, facilitating certain companies to communicate with their members in only electronic form, easing the requirement of raising capital in distressed companies, allowing submitting affidavits with self-certification, allowing companies to hold general meetings in virtual, physical or hybrid modes, strengthening the National Financial Reporting Authority (NFRA) and prohibiting conversion of co-operative societies into a company. Under LLP Act, it recommended to ease incorporation and compliance requirements for producer organisations of farmers, fishermen or artisans.
Recommendations of CLC were deliberated by various stakeholders and considered by the High-Level Committee on Non-Financial Regulatory Reforms (HLC-NFRR), chaired by former cabinet secretary and NITI Aayog member Rajiv Gauba. In her 2025-26 budget speech, the finance minister had announced about constituting the committee. “A High-Level Committee for Regulatory Reforms will be set up for a review of all non-financial sector regulations, certifications, licenses, and permissions,” she said on February 1 last year.
