A S BANKA ADVISORS

The Corporate Laws (Amendment) Bill, 2026 is the most significant proposed rewrite of the Companies Act, 2013 and the LLP Act, 2008 in years. It was introduced in the Lok Sabha on 23 March 2026 and is pending in Parliament. Before you read a single number below, hold one fact firmly: this is a Bill under scrutiny, not law. Until both Houses pass it, the President assents and it is notified, today’s Companies Act and LLP Act apply unchanged. The value right now is to model the impact, not to act on it.

A bigger “small company”: read the ceiling carefully

Small-company status unlocks a long list of relaxations: fewer board meetings, simplified annual returns, no mandatory cash-flow statement and lighter penalties. The headline is that the Bill raises the statutory ceiling to Rs 20 crore paid-up capital and Rs 200 crore turnover. The advisory nuance founders miss: Rs 20 crore and Rs 200 crore are the new outer ceilings the rules can prescribe up to, not the operative limits. Since 1 December 2025, G.S.R. 880(E) has set the operative limits at Rs 10 crore paid-up capital and Rs 100 crore turnover, equal to today’s statutory ceilings. So a far wider band of private companies could become “small,” but only if the government then raises the prescribed rule-limits toward the new ceiling. Plan for the possibility; do not assume the jump is automatic.

Buyback liberalisation: the change founders and investors will feel

For anyone planning a capital return or an investor exit, the Section 68 changes are the most commercially interesting part of the Bill. Section 68 today is rigid on timing. The Bill proposes greater flexibility for prescribed companies, with the stated aim of easing private-equity and venture-capital exits. Clause 29 of the Bill would let prescribed classes of companies make up to two buy-back offers within one year, the second not earlier than six months after the first closes, and would let the Government prescribe a different buy-back limit for them; the Notes on Clauses say debt-free companies can be considered for more than one buy-back a year. If you are designing a buyback or a secondary today, build it on current law and keep the proposed flexibility as an option you revisit once the law is notified.

Easier fast-track mergers, a lighter CSR net and a stronger NFRA

Three more easings round out the picture. Fast-track merger (Section 233) approval thresholds are proposed to drop from 90 percent to a majority of members or class of members present and voting who hold “at least seventy-five per cent. of the value in shares held by such members present and voting” (clause 69 of the Bill), with the creditor approval threshold also falling from nine-tenths to at least three-fourths. That makes it harder for a small holdout block to stall a group reorganisation. The CSR trigger is proposed to rise from Rs 5 crore to Rs 10 crore of net profit, taking a layer of smaller companies out of the CSR net. On the oversight side, the NFRA is proposed to become a body corporate with perpetual succession and its own fund, with clearer powers to specify investigation procedure and to issue advisories, censures and warnings to auditors. The LLP Act also gets a route to convert specified trusts, registered with SEBI or the IFSC Authority and in prescribed activities, into LLPs.

What to do now: prepare, do not act

• Map your private-company clients or group entities against the proposed Rs 20 crore and Rs 200 crore ceilings to see who could gain small-company status.
• Flag buyback and exit plans where the proposed Section 68 flexibility could change timing, but execute anything live today on current law.
• Watch the Bill in Parliament. Its passage, and any amendments made along the way, will shape the final thresholds, buyback conditions and effective dates.
• Do not change your compliance posture. Keep current Companies Act and LLP Act requirements running, including live items such as the DIR-3 KYC due date of 30 June 2026 and the Companies Compliance Facilitation Scheme 2026 closeout.

The direction of travel is clear: a lighter compliance load for smaller private companies, more flexible buybacks for capital returns and exits, easier fast-track mergers, and a more institutionally robust audit regulator. None of it is law yet. The right response is to prepare and model now, then act only once a final Act is passed and notified.

This article is for general information only and is not legal or professional advice. The Corporate Laws (Amendment) Bill, 2026 is a pending Bill and is not in force; the thresholds, mechanics and section references described are proposals and may change before enactment. Please consult a qualified professional before taking any decision.

Want to understand how the proposed small-company, buyback and NFRA changes could affect your company or your clients? Get Expert Guidance. CA Adityavikram Banka, Founder, A S Banka Advisors Private Limited. Book a call: https://calendly.com/asbanka-info/30min