NEW DELHI — Finance Minister Nirmala Sitharaman has introduced the Corporate Laws (Amendment) Bill in Parliament, proposing to decriminalize specific procedural violations under Section 186 of the Companies Act. The Bill, which has been referred to a Joint Parliamentary Committee (JPC), aims to replace criminal prosecution with a civil penalty framework for non-compliance with loan and investment disclosures.

Key Proposed Changes:

• Decriminalization: Violations related to maintaining registers and disclosing inter-corporate loans (sub-sections 9 and 10 of Section 186) will no longer face criminal punishment.
• New Penalty Structure: A graded monetary system will replace jail time:
• Companies: ₹1 lakh flat penalty, plus ₹500 per day for continued default (capped at ₹5 lakh).
• Officers in Default: ₹25,000 penalty, plus ₹200 per day for continued non-compliance (capped at ₹1 lakh).
• Scope: The Bill also introduces various amendments to the Limited Liability Partnership (LLP) Act, 2008, focused on ease of doing business.

The move is part of the government’s broader strategy to reduce the compliance burden on India Inc. and differentiate between serious fraud and minor procedural lapses.