New Delhi: A Parliamentary panel on Monday proposed a series of changes to the Corporate Laws (Amendment) Bill, 2026, including replacing certain compliance-related fines with a fixed penalty of Rs 50,000, allowing in-kind CSR contributions by small companies and making it easier for foreign firms to shift their domicile to India's International Financial Services Centre (IFSC).
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The Joint Committee on the Bill, chaired by BJP MP Sudheer Gupta, submitted its over 1,100-page report to the Lok Sabha. The Bill, introduced by Finance and Corporate Affairs Minister Nirmala Sitharaman on March 23, seeks to further improve the ease of doing business through amendments to the Companies Act and the Limited Liability Partnership (LLP) Act.
To support the government's decriminalisation agenda, the panel recommended replacing fines of up to Rs 1 lakh for certain compliance failures with a fixed penalty of Rs 50,000.
On corporate social responsibility (CSR), it suggested retaining the existing eligibility threshold of Rs 10 crore net profit, permitting in-kind CSR contributions for small companies, maintaining a negative list of ineligible implementing agencies and ensuring that any exemption from CSR obligations remains under Parliament's control.
The committee also proposed lowering the minimum age for appointment as Managing Director, Whole-time Director or Manager from 21 years to 18 years, while increasing the upper age limit from 70 years to 75 years.
To attract global businesses, it recommended allowing foreign companies to seamlessly re-domicile to India's IFSC without first winding up operations in their home jurisdictions.
The panel opposed extending the proposed exemption from mandatory statutory audits to public companies, saying the relaxation should be restricted to small businesses.
On insolvency reforms, it called for a statutory requirement to establish dedicated Insolvency and Bankruptcy Code (IBC) benches and make it mandatory for the National Company Law Tribunal (NCLT) President to constitute separate benches for IBC matters. It also urged the government to increase tribunal capacity to reduce case backlogs.
The committee further recommended removing imprisonment provisions for non-compliance with National Financial Reporting Authority (NFRA) orders, with penalties to be recovered through the proposed Section 454B framework instead of traditional recovery mechanisms.
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Among other suggestions, it proposed raising the compounding limit for offences to Rs 1 crore, creating an end-to-end digital compounding portal, publishing compounding orders on the MCA21 portal, and consulting regulators such as Sebi while framing rules to ensure compliance requirements remain practical.
The panel also recommended that investors and managers of trust-based Alternative Investment Funds (AIFs) be recognised as partners when such entities are converted into LLPs. It comprised 21 Lok Sabha and 10 Rajya Sabha members.
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