In a significant move towards enhancing India’s business environment, the government is preparing to amend the Companies Act during the upcoming Winter Session of Parliament. The proposed changes aim to make corporate operations more seamless, digital, and globally competitive — aligning India’s regulatory framework with international standards.
Key Highlights of the Proposed Amendments
1. Faster Mergers and Simplified Approvals
One of the central proposals seeks to streamline mergers and amalgamations, especially for start-ups, unlisted companies, and wholly-owned subsidiaries.
Currently, Section 233 of the Companies Act mandates a 90% shareholder approval for such mergers. The government is exploring options to reduce this threshold, enabling quicker decision-making and easing internal restructuring.
This step is expected to boost ease of doing business and accelerate corporate consolidation within the start-up ecosystem.
2. Electronic Documentation and E-Adjudication
To promote a digital-first corporate environment, the proposed amendments will allow certain classes of companies to serve documents exclusively in electronic format.
At present, companies must provide physical copies if shareholders request them, often causing delays and additional costs. The new provisions aim to make e-documentation the default mode, reinforcing India’s Digital India mission.
Additionally, the introduction of e-adjudication of offences will help speed up compliance and resolution processes, reducing dependency on manual intervention.
3. Administrative Restoration of Companies
Another major reform under consideration is enabling the administrative restoration of companies that were struck off from the register of companies — without requiring tribunal involvement.
This will simplify the revival process for companies, ensuring quicker restoration and reducing the burden on the National Company Law Tribunal (NCLT).
4. Enhanced Powers for National Financial Reporting Authority (NFRA)
The government also plans to strengthen the powers of the NFRA, allowing it to take action against auditors for non-compliance or lapses beyond professional misconduct.
For instance, the authority may gain powers to penalize auditors for administrative defaults such as failure to file annual returns, thereby tightening audit oversight and promoting higher standards of accountability.
5. Multi-disciplinary Partnerships Under Review
The government is also examining feedback on permitting multi-disciplinary professional partnerships — allowing firms to offer legal, secretarial, accounting, auditing, and actuarial services under one entity.
An expert committee will review the public feedback before finalizing this proposal, ensuring alignment with global practices and ethical considerations.
Objective: Boost Competitiveness and Global Ranking
The overarching goal of these amendments is to make Indian companies more globally competitive and improve India’s position in the World Bank’s Business-Ready Index.
By fostering a digital, transparent, and efficient corporate ecosystem, the government aims to create a business environment conducive to growth, innovation, and investor confidence.
Conclusion:
The proposed reforms to the Companies Act represent a major step toward modernizing India’s corporate governance landscape. With faster mergers, e-documentation, stronger oversight, and simplified compliance, these changes could redefine how businesses operate in India — paving the way for a more efficient, transparent, and future-ready economy.