Enabling environment: Proposed amendments to laws will facilitate business

The Union government recently introduced in the Lok Sabha the Corporate Laws (Amendment) Bill, 2026, to keep the related laws relevant to the fast-changing business environment. Although the Bill has been referred to the joint parliamentary committee for examination, a few of the proposed amendments are worth discussing. One of the most crucial amendments proposed in the Bill will allow the President to constitute one or more special Benches of the National Company Law Tribunal (NCLT) to dispose of any case under the Companies Act or the Insolvency and Bankruptcy Code, 2016. Experts, including those writing in this newspaper, have highlighted capacity constraints at the NCLT. It is arguably one of the biggest reasons for delays in resolving insolvencies, which currently take, on average, more than twice the time envisaged. Delay in the resolution of stressed assets can result in an avoidable loss of value. 

In this context, it is worth noting that Parliament is also discussing the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, which aims to quicken insolvency resolution. The insolvency-resolution framework could get a big boost, assuming both the Bills are passed. Besides, the Corporate Laws (Amendment) Bill proposes centralising merger applications at a single NCLT Bench. This will ease pressure on the entities concerned and speed up the merger process. In the context of corporate social responsibility (CSR), the amendment proposes to increase the mandatory net-profit threshold from ₹5 crore to ₹10 crore. Although the legal mandate on CSR itself is debatable, the increased threshold will be a relief for relatively small companies. Other amendments intend to ease the burden of compliance on smaller companies while tightening accountability norms for key managerial persons. 

For many years, conflicts of interest in how audit firms operate have been a concern. Such firms also provide non-audit services, which can affect audit quality. One of the amendments proposes that the auditor or audit firms of a prescribed class of companies will not provide any non-audit services to the company or its holding or subsidiary companies. The condition will apply for three years after the audit firm finishes its term. This would address market concerns over audit quality to a great extent. The amendments also seek to ease the terms of buyback for certain classes of companies. Such companies, subject to some conditions, will now be able to make two offers a year. This would allow companies more flexibility in timing such offers, depending on market conditions. 

Importantly, the Bill has provisions to bring the National Financial Reporting Authority (NFRA) on a par with other regulators. This will enable the NFRA to make regulations that govern the functioning of accounting  entities. This should help improve accounting standards in the country. The NFRA, in its recent reports, has highlighted significant gaps in the functioning of accounting firms. The quality of financial reporting is extremely important, given that India is looking to attract large investment. Further, to improve compliance, the Bill also proposes facilitating the conversion of alternative investment funds structured as trusts into limited-liability partnerships. Notably, subject to some conditions, the Bill proposes allowing companies to hold annual general meetings and extraordinary general meetings through videoconferencing or other audiovisual modes. Overall, the Bill has several provisions to enable companies and improve the business environment.