Module: | SEBI LODR & Corporate Governance Frameworks
Q30: Consider the following statements regarding the Corporate Laws (Amendment) Bill, 2026 introduced in the Lok Sabha:
1. The Bill seeks to amend key provisions of both the Limited Liability Partnership (LLP) Act, 2008 and the Companies Act, 2013.
2. The proposed amendments were finalized after fully incorporating the recommendations of the Company Law Committee (CLC) and undergoing public consultation.
3. Opposition to the Bill highlighted concerns over "excessive delegation," arguing that core policy matters like audit obligations were left to subordinate legislation rather than defined in the main text.
Which of the above statements is/are correct?
2. The proposed amendments were finalized after fully incorporating the recommendations of the Company Law Committee (CLC) and undergoing public consultation.
3. Opposition to the Bill highlighted concerns over "excessive delegation," arguing that core policy matters like audit obligations were left to subordinate legislation rather than defined in the main text.
Which of the above statements is/are correct?
✅ Correct Answer: D
🎯 Quick Answer:
D. All statements 1, 2, and 3 are correct.Structural Breakdown: Statement 1 is correct; the Bill targets both foundational corporate statutes.
Statement 2 is correct; the Ministry relied heavily on the CLC's multi-year stakeholder deliberations to draft the text.
Statement 3 is correct; during parliamentary proceedings, the Bill faced criticism for utilizing the phrase "as may be prescribed" too frequently, effectively granting the executive branch broad power to alter audit and CSR rules without returning to parliament.
Historical/Related Context: Indian corporate law frequently relies on "Rules" issued by the MCA to adjust thresholds for audits, CSR, and penalties quickly without the slow process of legislative amendment.
Causal Reasoning: While the government argues that delegating these powers to subordinate legislation allows for agile "ease of doing business" adjustments in a fast-paced economy, critics argue it bypasses parliamentary scrutiny on essential corporate governance policies.