Lok Sabha refers Corporate Laws (Amendment) Bill to Joint Parliamentary Committee

Syllabus: GS2/ Governance; GS3/ Economy 

Context

• The Corporate Laws (Amendment) Bill, 2026 has been introduced in the Lok Sabha and referred to a Joint Parliamentary Committee (JPC) for detailed examination.
  • The Bill seeks to amend the Companies Act, 2013 and the Limited Liability Partnership Act, 2008 to promote ease of doing business and improve corporate governance.

Key Provisions of the Bill

• Decriminalisation of Corporate Offences: The Bill proposes to shift several minor procedural violations from criminal liability to monetary penalties. This aims to reduce litigation burden and improve the business environment.
• Rationalisation of Penalties: Penalties are proposed to be made proportionate to the nature and severity of the default.
• Streamlining Regulatory Processes: The Bill seeks to simplify procedures under corporate laws. It aims to improve efficiency, reduce delays, and enhance investor confidence.
• The changes are based on recommendations of the Company Law Committee (CLC) 2022 report. The process included consultations with industry bodies, legal experts, and stakeholders.
• Changes Related to CSR Provisions: The Bill proposes modification in the calculation of net profits for Corporate Social Responsibility (CSR). It does not remove the mandatory 2% CSR spending requirement under the Companies Act, 2013.

Source: AIR