What Happened
- Finance Minister Nirmala Sitharaman moved the Finance Bill, 2026 for consideration and passage in the Lok Sabha during the second phase of the Budget Session (which runs until April 2, 2026).
- She also introduced the Corporate Laws (Amendment) Bill, 2026, which seeks to amend two key statutes: the Companies Act, 2013 and the Limited Liability Partnership Act, 2008.
- The amendment bill incorporates recommendations from the Company Law Committee's 2022 report, focusing on ease of doing business and reducing compliance burden.
- Key proposed changes include CSR-related relaxations — especially exemptions for certain smaller companies from mandatory CSR obligations — and structural reforms to address regulatory gaps.
- Several ministers also tabled reports on women's empowerment and urban affairs during the same session.
Static Topic Bridges
Finance Bill — Constitutional and Parliamentary Significance
The Finance Bill is an annual legislative instrument through which the government implements budgetary tax proposals. Under Article 110 of the Constitution, a Finance Bill that contains provisions dealing exclusively with tax matters qualifies as a Money Bill. Money Bills can only be introduced in the Lok Sabha (not Rajya Sabha), and the Rajya Sabha's role is limited to returning it with recommendations within 14 days — which the Lok Sabha may or may not accept.
- Article 110 defines Money Bills; Article 109 governs the procedure for passing Money Bills
- Finance Bill must be passed by both Houses within 75 days of presentation, failing which the provisions in the Bill lapse
- The Finance Bill, once passed as the Finance Act, gives legal effect to the tax proposals in the Union Budget
- The Budget Session typically has two phases: pre-recess (February) and post-recess (March–April)
Connection to this news: The Finance Bill 2026 was moved for consideration in the post-recess phase of the Budget Session, completing the constitutional requirement that budget proposals receive legislative approval before the start of the new financial year (April 1).
Companies Act, 2013 — Structure and CSR Framework
The Companies Act, 2013 is the principal legislation governing company formation, operation, and dissolution in India, replacing the earlier Companies Act, 1956. Section 135 of the Act mandates Corporate Social Responsibility (CSR) spending for companies meeting any of three thresholds: net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more in the preceding financial year.
- Section 135(5): Eligible companies must spend at least 2% of average net profits of the preceding three financial years on CSR activities
- CSR Committee: Companies above threshold must constitute a Board-level CSR Committee with at least 3 directors, including one independent director
- Unspent CSR funds must be transferred to a government-designated fund within 6 months of the financial year end (as per 2019 amendment)
- The Corporate Laws (Amendment) Bill 2026 proposes to relax CSR obligations for certain smaller or less resource-intensive entities, based on Company Law Committee (2022) recommendations
Connection to this news: The 2026 amendment bill addresses a longstanding concern that smaller entities within the threshold bracket face disproportionate compliance burdens under the CSR mandate. The proposed relaxations aim to calibrate the obligation more precisely to a company's capacity.
Limited Liability Partnership (LLP) Act, 2008 — Features and Recent Reforms
The LLP Act, 2008 (in force from March 31, 2009) introduced a hybrid business structure in India that combines the flexibility of a partnership with limited liability protection. LLPs have a separate legal identity, perpetual succession, and partners' liability is limited to their agreed contribution — unlike in traditional partnerships under the Indian Partnership Act, 1932.
- LLP (Amendment) Act, 2021 (effective April 1, 2022) introduced 29 amendments including: concept of start-up LLP and small LLP, reduction of residency requirement for designated partners from 182 days to 120 days, decriminalization of many offences (criminal to civil/monetary penalties)
- Late filing penalty framework was rationalized (removal of the earlier 300-day cap on late filing)
- The Corporate Laws (Amendment) Bill 2026 further amends the LLP Act to address gaps identified by the Company Law Committee 2022 report
Connection to this news: The 2026 bill continues the legislative trajectory of making LLPs a more accessible and less compliance-heavy structure, particularly benefiting startups and small enterprises that prefer the LLP format over a private limited company.
Key Facts & Data
- Budget Session 2026 second phase duration: resumes after recess, runs until April 2, 2026
- Companies Act 2013 CSR threshold: net worth ≥ ₹500 crore OR turnover ≥ ₹1,000 crore OR net profit ≥ ₹5 crore
- CSR spending mandate: 2% of average net profits of preceding 3 financial years (Section 135(5))
- LLP Act in force: March 31, 2009
- LLP Amendment Act, 2021 introduced approximately 29 changes (effective April 1, 2022)
- Company Law Committee 2022 report: basis for most provisions in the Corporate Laws (Amendment) Bill 2026
- Finance Bill, once passed, becomes the Finance Act — gives legal effect to Union Budget tax proposals