| The Corporate Laws (Amendment) Bill, 2026, introduced in Lok Sabha on March 18, 2026, proposes 107 amendments to the Companies Act, 2013 to enhance "ease of doing business". Some provisions have been inserted and some have been amended. Key highlights of the proposals (Part- I) which cover following Chapters are as under: Chapter II- Incorporation of Company and Matters Incidental Thereto Chapter III- Prospectus and Allotment of Securities Chapter VI- Registration of Charges Chapter VII- Management and Administration Chapter VIII- Declaration and Payment of Dividend Chapter IX- Accounts of Companies |
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| Section | Topic | Companies Act 2013 | Companies (Amendment) Bill 2026 | Impact of Companies (Amendment) Bill 2026 | |||||
| Chapter II- Incorporation of Company and Matters Incidental Thereto | |||||||||
| 4 | Memorandum | Section 4(5)(ii) Where after reservation of name under clause (i), it is found that name was applied by furnishing wrong or incorrect information, then,— (a) if the company has not been incorporated, the reserved name shall be cancelled and the person making application under sub-section (4) shall be liable to a penalty which may extend to one lakh rupees; |
Bill seeks to amend sub-clause (a) of clause (ii) of sub-section (5) of section 4 of the Companies Act to provide for a fixed penalty amount of fifty thousand rupees where companies default in compliance with such provisions. | Introduces a fixed penalty of Rs.50,000 (Earlier- Penalty was variable / discretionary) Applicable where a company defaults in complying with name provisions |
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| 7 | Incorporation of Company | Section 7(1)(b) a declaration in the prescribed form by an advocate, a chartered accountant, cost accountant or company secretary in practice, who is engaged in the formation of the company, and by a person named in the articles as a director, manager or secretary of the company, that all the requirements of this Act and the rules made thereunder in respect of registration and matters precedent or incidental thereto have been complied with; | Bill seeks to amend clause (b) and insert new clause (ba) in sub-section (1) of section 7 of the Companies Act to provide that the requirement of declaration by an advocate, chartered accountant, cost accountant or company secretary in practice during formation or incorporation of a company shall be applicable only when the company engages such professionals in its formation or incorporation. | Earlier declaration by a professional (CA/CS/CMA/Advocate) was mandatory in all incorporations Now such declaration is required only if the company has actually engaged that professional. Reduces compliance burden on Startups / small businesses not using professionals |
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| 20 | Service of documents | Bill seeks to insert a proviso after sub-section (2) of section 20 of the Companies Act to provide that service of prescribed class of documents by prescribed class or classes of companies to their members shall take place only through electronic mode in such manner as may be provided by rules. Since electronic communication is cost-effective and convenient mode for dispatching and delivering documents the proposed amendments seeks to allow communication in such form. The manner in which members would be entitled to receive physical copies of the prescribed classes of documents would be provided in the rules. In the second proviso, it is proposed to replace the words “annual general meeting”, with the words “general meeting” to allow determination of fees for delivery of any document to a member through a particular mode in the extraordinary general meetings also. | As per proposal prescribed class of companies will be required to send certain prescribed documents to members only through electronic mode. The class of companies and type of documents will be defined in the Rules. Companies can charge fees for sending documents via specific modes not just for AGM, but also for Extraordinary General Meetings (EGM) |
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| 12A | New Section | Bill seeks to insert a new section 12A in the Companies Act to provide that the prescribed class or classes of companies shall maintain a website, an email address and other modes of communication in such form and manner as may be provided by rules. It further provides that the details of website, e-mail address and other modes of communication, and the changes therein shall be intimated to the Registrar in such form and within such period as may be provided by rules. The clause is sought to be made applicable to listed companies or other unlisted public companies meeting relevant thresholds to be provided by rules. | Prescribed class of companies ( Listed companies and Large unlisted public companies (based on thresholds in rules) to maintain website, official email address, other prescribed communication modes and mandatory to Inform Registrar (ROC) of these details, report any changes within prescribed time | ||||||
| Chapter III- Prospectus and Allotment of Securities | |||||||||
| Section 24 | Power of Securities and Exchange Board to Regulate Issue and Transfer of Securities, etc. |
Section 24:- (2) The Securities and Exchange Board shall, in respect of matters specified in sub-section (1) and the matters delegated to it under proviso to sub-section (1) of section 458, exercise the powers conferred upon it under sub-sections (1), (2A), (3) and (4) of section 11, sections 11A, 11B and 11D of the Securities and Exchange Board of India Act, 1992. | Bill seeks to amend sub-section (2) of section 24 of the Companies Act, to omit the words “and the matters delegated to it under proviso to sub-section (1) of section 458”. The proviso to sub-section (1) in section 458 referring to delegation of powers under sections 194 and 195 to the Securities and Exchange Board of India, as well as, sections 194 and 195 of the Companies Act were omitted in 2017. The reference to such proviso to sub-section (1) of section 458 in sub-section (2) of section 24, accordingly, is redundant and being omitted. | Bill proposes to remove the words: “and the matters delegated to it under proviso to sub-section (1) of section 458” from Section 24(2 Earlier:- Section 458(1) proviso allowed delegation of certain powers (specifically under Sections 194 & 195) to SEBI. However: Sections 194 & 195 were already omitted in 2017. Consequently, the related proviso in Section 458(1) became irrelevant. Despite this, Section 24(2) still contained a reference to that proviso — which is now outdated. |
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| Section 26 | Matters to be Stated in Prospectus | Section 26:- (9) If a prospectus is issued in contravention of the provisions of this section, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees and every person who is knowingly a party to the issue of such prospectus shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupee. | Bill seeks to substitute sub-section (9) of section 26 of the Companies Act, to provide that if a prospectus is issued in contravention of such section, the company and every person who is knowingly a party to the issue of such prospectus shall be liable to a penalty of two lakh rupees. Accordingly, the offence is being decriminalised. | Bill seeks to substitute sub-section (9) of Section 26. New provision states: If a prospectus is issued in contravention of Section 26, then company, and every person knowingly involved shall be liable to a penalty of Rs.2,00,000. Earlier violation could attract criminal liability (fine and/or prosecution), now only civil penalty. |
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| Section 40 | Securities to be Dealt with in Stock Exchanges | Section 40:- (5) If a default is made in complying with the provisions of this section, the company shall be punishable with a fine which shall not be less than five lakh rupees but which may extend to fifty lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to three lakh rupees. Section 40:- (3) All monies received on application from the public for subscription to the securities shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than— (a) for adjustment against allotment of securities where the securities have been permitted to be dealt with in the stock exchange or stock exchanges specified in the prospectus; or (b) for the repayment of monies within the time specified by the Securities and Exchange Board, received from applicants in pursuance of the prospectus, where the company is for any other reason unable to allot securities. |
Bill seeks to amend sub-section (5) of section 40 of the Companies Act, to provide that punishment under such sub-section shall be applicable only for defaults under sub-section (3) thereby decriminalising offences under sub-sections (1), (2) and (4) of section 40. It further seeks to insert new sub-section (5A) to provide that in case of defaults (under sub-sections other than sub-section (3), penalty of twenty-five lakh rupees for every company and two lakh rupees for every officer of the company shall be leviable. | As per proposal decriminalisation of offences under sub-sections (1), (2) and (4) of section 40 Earlier all violations under Section 40 were subject to criminal fines (fine based criminal provision), As per proposal only Section 40(3) remains criminal. In sections 40(1), (2), (4) civil penalties of twenty-five lakh rupees for every company and two lakh rupees for every officer of the company will be applicable |
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| Section 42 | Offer or Invitation for Subscription of Securities on Private Placement | Section 42:- (2) A private placement shall be made only to a select group of persons who have been identified by the Board (herein referred to as "identified persons"), whose number shall not exceed fifty or such higher number as may be prescribed excluding the qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option in terms of provisions of clause (b) of sub-section (1) of section 62, in a financial year subject to such conditions as may be prescribed. (10) Subject to sub-section (11), if a company makes an offer or accepts monies in contravention of this section, the company, its promoters and directors shall be liable for a penalty which may extend to the amount raised through the private placement or two crore rupees, whichever is lower, and the company shall also refund all monies with interest as specified in sub-section (6) to subscribers within a period of thirty days of the order imposing the penalty. |
Bill seeks to amend the marginal heading of section 42 of the Companies Act by substituting the word “shares” with the word “securities”. It further seeks to amend sub-section (2) to insert the words “or such other scheme linked to the value of the share capital of a company”, after the words, “employee stock option”, in order to recognise instruments such as Restricted Stock Units and Stock Appreciation Rights, in addition to Employee Stock Option Plans, as executive compensation to be issued with approval of shareholders. It also seeks to amend sub-section (10) to replace the words “which may extend to”, with the words “equivalent to” to bring in more transparency in levy of penalties. | Proposal to amend Section 42 to cover all securities, recognises share-linked compensation schemes like Restricted Stock Units and Stock Appreciation Rights, and makes penalties more transparent by fixing their amount. | |||||
| Chapter- VI- Registration of Charges | |||||||||
| 77 | Duty to Register Charges, etc. | Section 77:- (1) It shall be the duty of every company creating a charge within or outside India, on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of the charge signed by the company and the charge-holder together with the instruments, if any, creating such charge in such form, on payment of such fees and in such manner as may be prescribed, with the Registrar within thirty days of its creation: Provided that the Registrar may, on an application by the company, allow such registration to be made (a) in case of charges created before the commencement of the Companies (Amendment) Ordinance, within a period of three hundred days of such creation; or (b) in case of charges created on or after the commencement of the Companies (Amendment) Ordinance, within a period of sixty days of such creation, on payment of such additional fees as may be prescribed: Provided further that if the registration is not made within the period specified (a) in clause (a) to the first proviso, the registration of the charge shall be made within six months from the date of commencement of the Companies (Amendment) Ordinance, on payment of such additional fees as may be prescribed and different fees may be prescribed for different classes of companies; (b) in clause (b) to the first proviso, the Registrar may, on an application, allow such registration to be made within a further period of sixty days after payment of such advalorem fees as may be prescribed. Provided also that any subsequent registration of a charge shall not prejudice any right acquired in respect of any property before the charge is actually registered. Provided also that this section shall not apply to such charges as may be prescribed in consultation with the Reserve Bank of India. |
Bill seeks to insert proviso in sub-section (1) of section 77 of the Companies Act to provide that for prescribed class or classes of companies (such as, small companies) the period of “sixty days” referred to in clause (b) of second proviso shall be replaced with “one hundred and twenty days” so that such class or classes of companies get 60 additional days for filing e-forms relating to the registration of charges, in the interest of ease of compliances. | A new proviso is proposed in Section 77(1) in which prescribed class(es) of companies like small companies, registration of charge time limit of 60 days to be replaced with 120 days | |||||
| Chapter VII- Management and Administration | |||||||||
| 96 | Annual general meeting. | Section 96:- [(2) Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate: Provided that annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance: Provided further that] the Central Government may exempt any company from the provisions of this sub-section subject to such conditions as it may impose. Explanation.—For the purposes of this sub-section, "National Holiday" means and includes a day declared as National Holiday by the Central Government. |
Bill seeks to insert a new sub-section (3) in section 96 of the Companies Act to allow companies to hold their annual general meetings (AGMs) physically or through video conferencing or other audio-visual means, either wholly or partly, in such manner and subject to such terms and conditions, as may be provided by rules. It also seeks to provide that if the number of members referred to in sub-section (2) of section 100 of the Companies Act requisition the meeting to be held in a hybrid mode, the company shall hold the meeting in such mode. It further seeks to provide that every company shall hold its annual general meeting in physical mode at least once in every three years. | Legal Recognition of Virtual & Hybrid AGMs Earlier: VC-based AGMs allowed mainly via MCA circulars Allow companies to hold their annual general meetings (AGMs) physically or through video conferencing or other audio-visual means, either wholly or partly, in such manner As per proposal every company to hold its annual general meeting in physical mode at least once in every three years. |
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| 99 | Punishment for default in complying with provisions of sections 96 to 98 | Section 99:- If any default is made in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues. | Bill seeks to amend the marginal heading of section 99 of the Companies Act to clarify that such section shall provide for penalty in respect of default in complying with section 96 of the Companies Act. The clause also seeks to omit the words and figures “or section 97 or section 98 or in complying with any directions of the Tribunal” appearing in such section. Section 425 of the Act relating to power to punish for contempt shall be applicable in case of non-compliance of directions of Tribunal under sections 97 and 98. It also seeks to provide that in case of default in complying with section 96, penalty as provided in the amended provision shall be leviable thereby decriminalising the offence. | Now it deals only with the non compliance of Section 96 only. Ealier it included section 97, 98 which related to Tribunal calling AGM and Tribunal calling meetings | |||||
| 101 | Notice of meeting | Section 101:- (1) A general meeting of a company may be called by giving not less than clear 2[twenty-one days'] notice either in writing or through electronic mode in such manner as may be prescribed: Provided that a general meeting may be called after giving shorter notice than that specified in this sub-section if consent, in writing or by electronic mode, is accorded thereto— (i) in the case of an annual general meeting, by not less than ninty-five per cent. of the members entitled to vote thereat; and (ii) in the case of any other general meeting, by members of the company— (a) holding, if the company has a share capital, majority in number of members entitled to vote and who represent not less than ninety-five per cent. of such part of the paid-up share capital of the company as gives a right to vote at the meeting; or (b) having, if the company has no share capital, not less than ninty-five per cent. of the total voting power exercisable at that meeting: Provided further that where any member of a company is entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others, those members shall be taken into account for the purposes of this sub section in respect of the former resolution or resolutions and not in respect of the latter. |
Bill seeks to amend the proviso to sub-section (1) of section 101 of the Companies Act to provide that EGMs conducted wholly through video conferencing or audio-visual means under sub-section (7) of section 100 may be called by giving a notice of at least seven days, or such other period, and in such manner as may be provided by rules. | Companies allowed to conduct EGMs wholly through video conferencing or audio-visual means and can be called by giving a notice of at least seven days | |||||
| Bll proposes to insert new provisions under Chapter VII- | |||||||||
| 88 | Register of Members, etc. | Bill seeks to insert a new sub-section (2A) in section 88 of the Companies Act to provide that no notice of any trust, whether express, implied, or constructive, shall be entered in the register of members or debenture holders as maintained under sub-section (1) of the said section. | No notice of any trust (express / implied / constructive) be entered in Register of Members Register of Debenture Holders Company to deal only with Registered shareholder / debenture holder Trustee–beneficiary relationships to remain outside company records |
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| 100 | Calling of Extraordinary General Meeting. | Bill seeks to insert a new sub-section (7) in section 100 of the Companies Act to allow companies to hold their extraordinary general meetings (EGMs) physically or through video conferencing or other audio-visual means, either wholly or partly, in such manner and subject to such terms and conditions, as may be provided by rules. It seeks to provide that if the number of members referred to in sub-section (2) of section 100 of the Companies Act requisition the meeting to be held in a hybrid mode, the company shall hold the meeting in such mode. | As per proposal companies allowed to hold their extraordinary general meetings (EGMs) physically or through video conferencing or other audio-visual means, either wholly or partly | ||||||
| Chapter VIII- Declaration and Payment of Dividend | |||||||||
| 124 | Unpaid Dividend Account | Section 124:- (5) Any money transferred to the Unpaid Dividend Account of a company in pursuance of this section which remains unpaid or unclaimed for a period of seven years from the date of such transfer shall be transferred by the company along with interest accrued, if any, thereon to the Fund established under sub-section (1) of section 125 and the company shall send a statement in the prescribed form of the details of such transfer to the authority which administers the said Fund and that authority shall issue a receipt to the company as evidence of such transfer. |
Bill seeks to amend sub-section (5) of section 124 of the Companies Act to provide that “any dividend which has not been paid or claimed” shall also be transferred to Investor Education and Protection Fund (IEPF) in cases where relevant shares have been transferred by the company under sub-section (6) of the said section to such Fund. It also seeks to amend sub-section (6) thereof, to insert the word “Authority” after the words “Investor Education and Protection Fund” appearing in the said sub-section. | It is proposed to transfer unpaid dividend to Investor Education and Protection Fund (IEPF) along with shares, and IEPF Authority is clearly recognised as the responsible body Earlier dividend transfer and share transfer were not clearly linked and authority managing IEPF was not explicitly mentioned |
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| Bll proposes to insert new provisions under Chapter VIII- | |||||||||
| 125 | Investor Education and Protection Fund. | Bill seeks to insert a new clause (ma) in sub-section (2) of section 125 of the Companies Act to provide that the amounts in respect of shares bought back and extinguished, remaining unpaid or unclaimed for seven or more years shall be credited to the IEPF. It further seeks to substitute clause (a) of sub-section (3) of the said section, to provide that the IEPF shall be utilised for the refund in respect of unclaimed dividends and amounts referred to in clauses (h) to (n) of sub-section (2) of the said section which is due for refund. It also seeks to amend sub-section (4) to provide that any person claiming to be entitled to the amount under sub-section (2) may apply in accordance with such procedure and on submission of such documents as may be provided by rules. It also seeks to insert a new sub-section (12) to empower the IEPF Authority to delegate to any member, officer or any other person any of its powers and functions under the Companies Act, as it deems necessary. | Proposal includes transfer of amounts in respect of shares bought back and extinguished, remaining unpaid or unclaimed for seven or more years credited to the IEPF | ||||||
| Chapter IX- Accounts of Companies | |||||||||
| 128 | Books of account, etc., to be kept by company | Section 128:- (6) If the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person of a company charged by the Board with the duty of complying with the provisions of this section, contravenes such provisions, such managing director, whole-time director in charge of finance, Chief Financial officer or such other person of the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees. | Bill seeks to amend sub-section (6) of section 128 of the Companies Act to provide that in case of contravention of such section [except sub-section (1) or sub-section (5)] the managing director, the whole-time director in charge of finance, the Chief Financial Officer, or any other person of a company charged by the Board with the duty of complying with the provisions of this section, shall be liable to a penalty of five lakh rupees in case of a listed company and fifty thousand rupees in case of any other company. It further seeks to insert a proviso to sub-section (6) to provide that in case of contravention relating to sub-section (1) or sub-section (5) the above persons shall be liable to a penalty of twenty lakh rupees in case of a listed company and five lakh rupees in case of any other company. Accordingly, the clause seeks to decriminalise offences under this section. | The amendment shifts Section 128 from criminal liability to a stricter, penalty-driven regime with higher penalties for core violations, ensuring better compliance with reduced litigation. | |||||
| 131 | Voluntary Revision of Financial Statements or Board’s Report | Section 131:- (1) If it appears to the directors of a company that— (b) the report of the Board, do not comply with the provisions of section 129 or section 134 they may prepare revised financial statement or a revised report in respect of any of the three preceding financial years after obtaining approval of the Tribunal on an application made by the company in such form and manner as may be prescribed and a copy of the order passed by the Tribunal shall be filed with the Registrar: Provided that the Tribunal shall give notice to the Central Government and the Incometax authorities and shall take into consideration the representations, if any, made by that Government or the authorities before passing any order under this section: Provided further that such revised financial statement or report shall not be prepared or filed more than once in a financial year: Provided also that the detailed reasons for revision of such financial statement or report shall also be disclosed in the Board's report in the relevant financial year in which such revision is being made. |
Clause 39 of the Bill seeks to amend long line in clause (b) of sub-section (1) of section 131 of the Companies Act by inserting the word “immediately” before the words “preceding financial years. | Proposal restricts revision of financial statements to only the immediately preceding financial years, preventing reopening of older accounts and ensuring greater certainty and discipline in financial reporting. | |||||
| 135 | Corporate Social Responsibility. | Section 135:- (1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. Provided that where a company is not required to appoint an independent director under sub-section (4) of section 149, it shall have in its Corporate Social Responsibility Committee two or more directors. (6) Any amount remaining unspent under sub-section (5), pursuant to any ongoing project, fulfilling such conditions as may be prescribed, undertaken by a company in persuance of its Corporate Social Responsibility Policy, shall be transferred by the company within a period of thirty days from the end of the financial year to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, and such amount shall be spent by the company in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year. (9) Where the amount to be spent by a company under sub-section (5) does not exceed fifty lakh rupees, the requirement under sub-section (1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such company. |
Bill seeks to amend sub-section (1) of section 135 of the Companies Act to substitute the words “five crore” with the words “ten crore, or such sum as may be prescribed”. This is aimed at enhancing the applicability threshold under sub-section (1) of the said section relating to net profit. It seeks to replace the period of “thirty days” in sub-section (6) to “ninety days” to enable additional time period for transfer of unspent Corporate Social Responsibility (CSR) amounts relating to ongoing projects to the Unspent Corporate Social Responsibility Account with the scheduled bank. It also seeks to amend sub-section (9) to replace the words “fifty lakh rupees” to “one crore rupees or such higher amount as may be prescribed” to ensure that companies having CSR amount up to one crore rupees (or higher amount) need not constitute the Corporate Social Responsibility Committee. It also seeks to insert a new sub-section (10) to provide that prescribed class or classes of companies which fulfil prescribed conditions shall not be required to comply with the said section. |
Bill proposes to increae the Net profit threshold from 5 crore rupees to 10 crore rupees And it also propses additional time period for transfer of unspent Corporate Social Responsibility (CSR) amounts relating to ongoing projects to the Unspent Corporate Social Responsibility Account with the scheduled bank from 30 days to 90 days CSR Committee not required if CSR amount is up to one crore rupees (or higher amount) |
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| Bll proposes to insert new provisions under Chapter IX- | |||||||||
| 134 | Financial Statement, Board’s Report, etc. | Bill seeks to insert clause (fa) in sub-section (3) of section 134 of the Companies Act to provide that report of Board shall include explanations or comments by the Board on every observation or comment of the auditors on financial transactions or matters which have any adverse effect on the functioning of the company and any qualification, reservation or adverse remark relating to the maintenance of accounts and other matters connected therewith in such form as may be provided by rules. It also seeks to insert clause (pa) to provide that Board’s report shall include details in respect of composition of the Audit Committee and where the Board had not accepted any recommendation of the Audit Committee, a statement along with the reasons for the same. | Mandatory detailed explanations on adverse Auditor remarks & qualifications |
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