Corporate Laws (Amendment) Bill, 2026 – A Detailed Legislative Analysis

Overview

The Corporate Laws (Amendment) Bill, 2026 (Bill No. 85 of 2026), introduced in the Lok Sabha, proposes sweeping reforms across the Companies Act, 2013 and the Limited Liability Partnership Act, 2008. Given the scale and significance of these proposed changes, the Lok Sabha referred this Bill to a Joint Parliamentary Committee on 23rd March 2026 for deeper examination and scrutiny. This article presents a structured, section-wise breakdown of the major proposals contained in the Bill, covering LLP-related changes, corporate governance reforms, audit regulatory overhaul, and ease-of-doing-business measures.

Part I: LLP Act, 2008 – Proposed Amendments

IFSC and IFSCA – Formal Recognition Under LLP Framework

One of the foundational changes in the Bill is the formal incorporation of definitions for International Financial Services Centre (IFSC) and the International Financial Services Centres Authority (IFSCA) within the LLP Act, 2008. This brings the LLP regulatory framework into alignment with the broader financial services regulatory ecosystem in India.

Concept of Specified IFSC LLP

A new category of LLP — the Specified IFSC LLP — is introduced, enabling incorporation within an IFSC and subjecting it to IFSCA oversight. This creates a distinct class of LLP, separate from conventional LLPs operating under the standard regulatory framework.

Key features of Specified IFSC LLPs include:

  • Restricted Objects: A proviso inserted in Section 11(2) mandates that the objects of a Specified IFSC LLP must be confined strictly to financial services activities permitted under the IFSCA Act, 2019, along with activities incidental thereto.
  • Registered Office: An amendment to Section 13 requires a Specified IFSC LLP to always maintain its registered office within the IFSC.
  • Mandatory Suffix: Under Section 15, such an LLP must carry the suffix "International Financial Services Centre LLP" in its name.
  • Books and Accounts in Foreign Currency: Section 34 is amended to require IFSC LLPs transacting in foreign currency to maintain books, accounts, and financial statements in that foreign currency. However, IFSCA retains the discretion to permit maintenance of books in INR where appropriate.
  • Foreign Currency Filings: Section 68 clarifies that documents filed by an IFSC LLP may be submitted in foreign currency, but all fees and penalties must be paid exclusively in INR.

Permitted Foreign Currency

The Bill introduces the concept of foreign currency transactions for LLPs operating within the IFSC. The specific currency to be used will be notified by IFSCA in consultation with the Central Government.

Dual Declaration Requirement – Section 11(1)

Prior to this amendment, incorporation documents required only a general compliance declaration. The Bill proposes two new clauses:

  • **Clause (c)😗* Every subscriber to the incorporation document must declare that all requirements under the LLP Act and the applicable rules have been duly complied with.
  • **Clause (d)😗* Where a professional is engaged in the incorporation process — whether an Advocate, Chartered Accountant, Cost Accountant, or Company Secretary in practice — a formal professional declaration certifying proper compliance with incorporation requirements becomes mandatory.

LLP Agreement – Sections 23 and 25

For LLPs regulated by SEBI (such as investment funds) or IFSCA (such as IFSC entities), the strict requirement of filing every change in the LLP agreement with the Registrar of Companies (ROC) may be relaxed. Instead, the filing obligations will be governed by rules prescribed by the Government, allowing for a more flexible compliance regime.

Further, under the revised Section 25, where a partner joins or exits during the year, or in other prescribed circumstances, there is no obligation for immediate filing. Such changes can instead be consolidated and submitted as part of a single annual filing at the year's end.

Partner Contributions – Section 32

Under the existing framework, contributions by partners could be made in money, property, or services, with values recorded and disclosed in INR. The Bill introduces a significant departure for IFSC LLPs:

  • Contributions to a Specified IFSC LLP must be made exclusively in foreign currency.
  • INR contributions will no longer be permissible going forward.
  • Any prior contributions made in INR must be converted into the applicable foreign currency.

Registered Valuer Requirement – Section 33A

A new Section 33A is proposed to apply Section 247 of the Companies Act, 2013 to LLPs. This means that valuation must be conducted by a Registered Valuer, bringing the LLP valuation framework in line with the formal, regulated valuation regime applicable to companies. This represents a significant professionalisation of the LLP valuation process.

Conversion of Trust to LLP – Section 57A

A major structural reform is the introduction of Section 57A, which permits Specified Trusts (those registered with SEBI or IFSCA) to convert into LLPs. This is particularly significant for investment structures such as Alternative Investment Fund (AIF) trusts.

Key conditions for such conversion include: