The Bill has been referred to a joint parliamentary committee (JPC) for scrutiny and stakeholder inputs before it returns for final consideration.
A key feature is making compliance more proportionate to size while retaining governance discipline. The proposed expansion of the “small company” thresholds (paidup capital from ₹10 crore to ₹20 crore; and the turnover from ₹100 crore to ₹200 crore) could bring more entities in the growth stage into a lighter compliance regime without lowering baseline standards. Additional fees for delayed filings are to be rationalised (including overall caps) and timelines for charge registration extended (the overall window up to 180 days), reducing punitive outcomes for procedural delays and supporting timely regularisation. Compliance requirements have been eased for small/one-person/dormant companies (one board meeting per year), and disclosures of director interest (under Form MBP-1) moved from the annual filing to a change-based trigger.
It also aligns corporate law with modern capital and talent realities. Recognising contemporary share-linked reward instruments beyond traditional Esop (employee stock-option plans) reflects how companies structure incentives today. Buyback provisions have been proposed to be modernised: Expanded eligibility (including Esop/sweat equity and similar schemes), flexibility for prescribed classes to undertake up to two buybacks a year (subject to a minimum gap), clearer computation mechanics, and removing affidavit-based solvency verification. With safeguards built through rules, these changes can reduce interpretational disputes and improve capital-management agility, particularly where companies are returning surplus cash or managing dilution from incentive plans.
A third theme is digital-first governance with checks intact. Annual general meetings (AGMs) and extraordinary general meetings (EGMs) may be held in physical mode, through videoconferencing/audiovisual means, or in hybrid form (subject to conditions), enabling hybrid meetings if requested, where thresholds are met. At least one physical AGM every three years preserves periodic in-person shareholder interaction. EGMs through videoconferencing may be convened on shorter notice (at least seven days or as prescribed). As electronic service becomes the default for prescribed classes, governance emphasis shifts from dispatch to proof-of-service integrity, recordkeeping, and stronger internal standard operating protocols.
Rationalising corporate social responsibility (CSR) aims to align obligations under this with capacity and reduce procedural slippage. The net-profit trigger rises from ₹5 crore to ₹10 crore (or as prescribed), the timeline for transferring unspent CSR amounts for ongoing projects has been extended from 30 to 90 days from year-end, and the thresholds for constituting CSR committee are proposed to be increased (₹50 lakh to ₹1 crore, or as prescribed). An enabling provision allows prescribed classes to be exempt from CSR subject to conditions, creating room for a more fact-based approach over time.
On corporate action and exits, several proposals can reduce procedural drag and improve predictability. Fast-track mergers/demergers become more workable through a 75 per cent “present and voting” approval threshold, and the jurisdiction of one Bench of the National Company Law Tribunal for schemes based on the transferee/resultant company can reduce multi-Bench filings. Restricting schemes for companies already in liquidation address overlap risks with insolvency processes. Strike-off grounds expand for inactive/non-filing companies, restoring prescribed categories shifts to regional directors, and summary liquidation is clarified, including the appointment of an official liquidator or a registered insolvency professional -- supporting quicker, more proportionate exits for low-risk closures.
The Bill proposes to streamline IFSC (International Financial Services Centre) compliance by moving IFSC entities to a foreign-currency standard for share capital and financial records, with INR presentation allowed only where the International Financial Services Centres Authority permits.
Finally, the move from criminalisation to proportionate enforcement is a welcome evolution. Routine defaults shift from fine/prosecution to civil penalties; adjudication matters by regional directors are expanded, freeing up NCLT time and enabling speedier resolution; and settlement and recovery mechanisms strengthen enforceability while reducing fear-based compliance. Pre-deposit requirements for certain appeals and higher compounding thresholds at the level of regional directors should encourage administrative closure over prolonged tribunal paths, while preserving remedies for genuine disputes.
Where the government can add disproportionate value is by sharpening last-mile mechanics so that intent translates into real experience. In incorporation, issues are often operational rather than legal: Wider acceptable address proofs/validity windows for cross-border execution, and a more responsive escalation mechanism at the processing stage would improve transparency and predictability. On exits, enabling a controlled mechanism to repatriate surplus funds during strike-off (after filing but before final order), expanding the practical reach of summary liquidation through thresholds and digital-first mechanics and considering a fast-track administrative exit for non-operational distressed entities (with safeguards) would strengthen capital recycling and investor confidence. Overall, the Bill is directionally strong, ie simpler where risk is low and sharper where the public interest is high. With last-mile refinements incorporated, it can deliver a more predictable and business-aligned corporate framework in practice.
The authors are, respectively, partner and national leader, entity compliance & governance, EY India; and partner, entity compliance & governance, EY India
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