The Corporate Laws (Amendment) Bill, 2026

OVERVIEW


  • The Corporate Laws (Amendment) Bill, 2026, introduced in the Lok Sabha, On March 23, 2026 proposes significant changes to the Companies Act, 2013 and the Limited Liability Partnership Act, 2008, with the objective of improving ease of doing business, simplifying compliance requirements, and strengthening the overall regulatory framework governing companies.
  • A key focus of the Bill is to create a differentiated and flexible legal framework for entities operating in International Financial Services Centres (IFSC), GIFT City, by aligning domestic corporate laws with global standards and practices.
  • The proposal focus on recognising LLPs in IFSC by allowing foreign currency share capital, while also decriminalising procedural defaults and easing compliance for AIFs structured as LLPs.

  • The following amendments have been introduced specifically to strengthen the regulatory framework and promote ease of doing business within IFSC.

SHARE CAPITAL & BOOKS OF ACCOUNT IN FOREIGN CURRENCY

 
 
  • The Bill proposes to insert a new section 43A in the Companies Act, 2013, mandates that IFSC companies must issue and maintain share capital in a permitted foreign currency specified by IFSCA.
  • Books of account, financial statements, and all records must also be maintained in foreign currency. Fees, fines, and penalties remain payable in INR.
  • Section 32 of the LLP Act receives the same treatment for Specified IFSC LLPs. Partner contributions must be in permitted foreign currency, and existing IFSC entities get a transition window to convert from INR.
  • This removes the INR conversion overhead for entities that operate entirely in USD or other foreign currencies, enabling cleaner books and cleaner reporting.

AIF TRUST TO LLP CONVERSION PERMITTED

 
  • The Bill proposes to insert a new section 57A in the LLP Act, 2008, to allow the conversion of a specified trust into a limited liability partnership in accordance with the provisions of Chapter X and the Fifth Schedule. It allows “specified trust” registered with SEBI or IFSCA to convert into an LLP.
  • All assets, liabilities, contracts, and proceedings transfer automatically. The conversion requires consent of 75% of investors.
  • This enables fund managers running AIFs as trusts to restructure into LLPs for better governance flexibility, clearer ownership, and potentially better tax treatment.
  • It bill also specified IFSC LLP to state its objects of financial service activities as per Section 3(1)(e) of IFSC Authority Act, 2019.

RELAXED PARTNER CHNAGE FILINGS 

 
  • Sections 23 and 25 of the LLP Act are amended so that for LLPs regulated by SEBI or IFSCA (i.e., AIFs), changes to the LLP agreement and partner additions or exits need to be reported to the Registrar only on an annual basis.
  • The earlier requirement of filing within 30 days of every change made fund structures impractical given the volume of investor onboarding and exits.

REGISTERED OFFICE REQUIREMENT IFSC LLP

 
  • Section 13 of the LLP Act, 2008, which governs the registered office of an LLP, is proposed to be amended to require specified IFSC LLPs to maintain their registered office within an IFSC at all times.
  • Further, the Bill proposes to insert a new proviso into Section 15(1) of the Act, requiring the specified IFSC LLP to include the suffix “IFSC LLP” in its name.

FILING IN PERMITTED FOREIGN CURRENCY

 
  • The Bill proposes to insert two provisos to Section 68(1), empowering the Central Government to require specified IFSC LLPs to file, record, or register documents in permitted foreign currency, in the prescribed manner.
  • At the same time, such LLPs will be required to pay all fees, fines, and penalties under the LLP Act and related rules in Indian rupees.

CONCLUSION

 
  • The Corporate Laws (Amendment) Bill, 2026 is expected to significantly strengthen GIFT IFSC by creating a more flexible, globally aligned regulatory environment.
  • By reducing compliance burdens, decriminalising minor offences, and empowering IFSCA as a unified regulator, it enhances ease of doing business and speeds up decision-making.
  • The liberalised LLP and corporate framework will attract global financial institutions, fund managers, and fintech players to establish operations in IFSC.
  • Additionally, alignment with global standards increases investor confidence and competitiveness against international financial hubs, these reforms position GIFT IFSC as a more efficient, investor-friendly, and internationally competitive financial centre.E

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