The Ministry of Corporate Affairs (MCA) is set to introduce a Corporate Amendment Bill proposing changes to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008, signalling the next phase of corporate law reforms aimed at easing compliance and rationalising processes.
The proposed amendments are expected to further decriminalise technical and procedural defaults, streamline filings and strengthen technology-driven oversight. While the stated objective is to improve ease of doing business, experts say companies should prepare for short-term operational resets as compliance systems and reporting frameworks are recalibrated.
A continued reform trajectory
Over the past five years, India has steadily moved away from criminal prosecution for routine corporate law lapses toward civil penalties and administrative adjudication. The forthcoming Bill appears to deepen that transition.
Amit Maheshwari, Managing Partner at AKM Global, says the move reflects a clear policy direction.
“The proposed amendments appear to be a continuation of the Government’s reform trajectory focused on decriminalisation, rationalisation of processes and greater regulatory agility. India has shifted from a prosecution-driven framework to a civil penalty and disclosure-based compliance regime,” he said.
This reduces the fear of imprisonment for procedural lapses. However, Maheshwari cautions that it simultaneously increases real-time digital scrutiny and administrative accountability.
Under the current framework, many offences that once attracted criminal liability have already been converted into monetary penalties. The next phase is expected to expand this approach while simplifying procedures and improving regulatory efficiency.
Broadly, the reform rests on three pillars: deregulation, digitisation and decriminalisation.
Compliance risk is changing — not disappearing
Rishi Agrawal, CEO and Co-founder of TeamLease RegTech, says decriminalisation does not mean reduced enforcement.
“Decriminalisation reduces the risk of imprisonment for procedural defaults, but it does not reduce compliance risk. When offences move to administrative adjudication, enforcement becomes faster and more predictable. That increases regulatory visibility,” he said.
In practical terms, enforcement may become quicker and more technology-driven. Penalties are likely to be imposed through structured adjudication rather than lengthy court proceedings. Delays, disclosure lapses and reporting errors become easier to track in a digitised ecosystem.
As a result, boards and senior management may face clearer and more direct accountability.
How prepared is corporate India?
Experts say preparedness has improved compared to earlier reform cycles, but readiness varies sharply by company size.
Large listed entities and established corporations typically have in-house compliance teams, digital reporting systems and external advisors. For them, regulatory resets are manageable operational adjustments — updating compliance matrices, revising board reporting formats and aligning internal controls.
Medium and small enterprises, however, face greater strain.
“They often lack in-house regulatory depth. When the law changes, they must stretch limited internal bandwidth or rely on external advisors, increasing cost and disruption,” Agrawal said.
A structural challenge lies in regulatory discovery. Amendments are often followed by changes in rules, forms and circulars across multiple portals. Many updates are not machine-readable, making identification and applicability assessment manual tasks.
With regulatory notifications spread across thousands of central and state government websites, tracking itself becomes a compliance burden.
Amit Agarwal, Partner at Nangia & Co LLP, sees the reform as part of a broader move toward technology-led regulation.
“The proposed reforms signal a continued shift toward system-driven compliance. While the regulatory intent is to reduce friction and enhance ease of doing business, the operational burden may increase in the short term due to system resets, enhanced validations and stricter enforcement timelines,” he said.
Companies may face revised e-forms, updated attachments and stronger validation checks. Internal templates, approval workflows and documentation standards may need updating. Listed entities and larger corporates could also see heightened scrutiny and increased documentation requirements.
In effect, while criminal exposure may reduce, the compliance environment could become more structured and time-sensitive.
Regulatory delegation and institutional changes
The Bill is also expected to explore regulatory delegation and institutional restructuring, particularly in relation to the National Financial Reporting Authority (NFRA). Potential proposals include separating audit review and disciplinary functions to improve operational efficiency.
However, experts caution that increased delegation to subordinate rules may result in more frequent updates through notifications and circulars.
“If substantive provisions are increasingly delegated to Rules, companies may face more frequent regulatory adjustments — form revisions, reporting changes and digital upgrades,” Maheshwari said.
Large corporations are structurally better equipped to absorb such volatility. MSMEs and smaller LLPs may find frequent changes operationally disruptive.
Ease of doing business — with execution clarity
The broader shift under the Companies Act is clear: from criminal enforcement to financial and governance accountability.
Decriminalisation supports ease of doing business by lowering criminal risk. But it simultaneously demands stronger internal controls, better documentation and continuous board-level oversight.
Experts stress that the success of the amendment Bill will depend heavily on implementation.
Clear transition timelines, consolidated guidance and stability in subordinate legislation will be crucial to avoid compliance uncertainty.
“Frequent but calibrated reforms are welcome. Unpredictable and fragmented notifications undermine policy stability. Regulatory agility must be matched with implementation clarity,” Maheshwari said.
For India Inc., the message is straightforward. The era of prosecution-led compliance may be fading, but the age of real-time, system-driven oversight is firmly in place. The compliance burden may look different — but it is unlikely to become lighter without robust internal systems and disciplined governance.
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