SBIL Important Amendments for December 2026 | 5–7 Marks Questions

The SBIL Important Amendments for December 2026 are among the most important topics for CS Executive aspirants, as amendment-based questions are frequently asked in the examination. The Institute of Company Secretaries of India (ICSI) has introduced several updates affecting company law, startup regulations, NBFC registration, FSSAI provisions, and other business laws covered under the SBIL syllabus.

These amendments are not only relevant for theoretical understanding but are also highly important from an exam perspective, especially for 5–7 marks descriptive questions and objective-type questions.

SBIL Amendments 

The Institute of Company Secretaries of India (ICSI) has released a significant supplement addressing changes in the Setting Up Business, Industrial & Labour Laws (SBIL) subject. These amendments are critical for students preparing for the December 2026 examinations, encompassing additions, deletions, and replacements across various chapters. 

 This update affects students re-appearing for exams or new students alike. The supplement covers changes in four chapters of Part A and 15 chapters of Part B, with specific focus on Chapters 2, 4, 8, 13, and 15.

Chapter 2: Corporate Entities and Companies

Corporate Entities and Companies covers the legal framework for different types of business entities, their incorporation process, company name reservation, and regulatory provisions under the Companies Act and LLP Act. 

Since these amendments are directly linked to company formation and compliance, they are important from both the objective and descriptive examination perspectives. 

Small Company Definition

The definition of a Small Company has been revised with increased limits to simplify classification. A Small Company is now defined as one, other than a public company, where:

• Paid-up Share Capital does not exceed ₹10 Crore.

• Turnover does not exceed ₹100 Crore.

Both conditions must be met simultaneously. This definition does not apply to Holding Companies, Subsidiary Companies, Section 8 Companies, or companies governed by a special act.

Name Reservation and Incorporation

The proposed name for a Company or LLP shall not be identical or too nearly resemble an existing company or LLP name. Examples of names considered too similar include:

• Existing: A1 Engineering Private Limited -> Proposed: A1 Engineers Private Limited

• Existing: Progressive Jewels LLP -> Proposed: Progressive Jewelers Private Limited

• Existing: Cross Border Exports Private Limited -> Proposed: Across Border Exports Private Limited
  These examples highlight that minor differences, like adding a word, changing spelling, or translation, can lead to rejection. These types of questions are highly likely to appear as direct questions in the exam.

Name Reservation Timelines

New time limits specify when a proposed name will not be permitted:

• Company in Liquidation: A name identical or similar to a company undergoing liquidation proceedings cannot be used for 2 years from its dissolution date.

• Company Struck Off: A similar name to a company struck off by the Registrar of Companies cannot be used for 20 years from the publication date in the Official Gazette.

• LLP in Liquidation or Struck Off: For LLPs, an identical or similar name cannot be used for 5 years from the relevant date in both liquidation and strike-off scenarios. (Memory Tip: For LLPs, the non-use period for identical/similar names is 5 years for both liquidation and strike-off, making it easy to remember.)

• Foreign LLP Name Reservation: A Foreign LLP applying for name reservation in Form 25 will have its name reserved for 3 years, requiring a fresh application for renewal.

Prohibited and Specific Name Usage

Certain names and abbreviations cannot be used for reservation:

• Popular Abbreviations: Examples include NHDC and BRICS.

• Foreign Country or City Names: Generally not considered, unless there is documentary proof of collaboration with a foreign entity.

• Section 8 Companies: Must include words like Foundation, Forum, Association, Federation, Chambers, Council, Electoral Trust, Institute, Establishment, Centre, Sansthan, Pratishthan, Mandal to signify their nature.

• Government Affiliation: Names must not suggest any relation to the Central or State Government unless genuinely government-related.

General Name Restrictions

Reiterated rules state that names will be rejected if:

• The only difference is between singular and plural forms.

• The order of words is changed.

• They are translations of existing names.

• They are offensive.

• The term 'British India' cannot be used.

Name Change of an Existing Company or LLP

To change a company or LLP name:

• A Board Resolution (for companies) or approval from Designated Partners (for LLPs) is required.

• Application is filed using RUN (for companies) or RUN LLP (for LLPs).

• Upon approval, a fresh Certificate of Incorporation is issued.

Chapter 4: Startups

Startups focuses on the legal framework, recognition criteria, and government support available for startups in India. 

These changes are important from an exam perspective and are likely to be tested through both objective questions and 5–7 marks descriptive questions.

Startup Definition

Changes to the Startup definition are very important for exams.

• Previously, a startup was a Private Company, Partnership Firm, or LLP. The major change is the inclusion of Cooperative Societies, including Multi-State Cooperative Societies.

• An entity is a startup for up to 10 years from its incorporation.

• The turnover limit has been increased; it shall not exceed ₹200 Crore for any of the preceding financial years.

• Summary of the Startup Definition:

1. Form of Entity: Incorporated as a Partnership Firm, Private Company, LLP, or Cooperative Society.

2. Duration: Up to 10 years from incorporation.

3. Turnover: Turnover for any preceding financial year does not exceed ₹200 Crore.

• The entity must also pursue innovation, development, or improvement of products, processes, or services. An entity ceases to be a startup if its turnover exceeds ₹200 Crore or it completes more than 10 years.

Deep Tech Startups

A new category, Deep Tech Startups, is introduced, characterised by:

• Utilising scientific methods, new knowledge, or advanced technology.

• Significant expenditure in Research & Development (R&D).

• Creation of Intellectual Property.

• Requirement of high capital, extensive infrastructure, and a long development period.

Due to extended R&D, Deep Tech Startups have different recognition criteria: 

DPIIT Recognition for Startups

For startup recognition, an entity must obtain recognition from DPIIT (Department for Promotion of Industry and Internal Trade). If applying as a Deep Tech Startup, the online application must explicitly demonstrate how it meets the Deep Tech attributes to qualify for the extended duration (20 years) and higher turnover limit (₹300 Crore).

Income Tax Exemption for Startups

Startups receive income tax exemption under Section 80-IAC for 3 years. (Memory Tip: Startups receive income tax exemption under Section 80-IAC for 3 years.) This exemption is available to both normal and Deep Tech Startups and requires a certificate from the Inter-Ministerial Board, with the application made in Form 1.

Conditions for Startups (Restrictions on Investments)

The conditions for startups are important and examinable. (Memory Tip: The conditions for startups are similar to those previously studied for Angel Tax (Section 56(2)(viib)), which restricts investments.) A startup must invest funds primarily in its business activities, innovation, and research. During its recognition period, a startup's funds must not be invested in:

• Land or buildings, unless held as stock-in-trade.

• Loans and advances, unless lending is the ordinary course of business.

• Capital contributions, unless related to the startup's core business.

• Shares and securities, unless related to the startup's core business.

• Purchase of high-value motor vehicles, aircraft, or yachts, unless leased or hired for trade purposes.

• Purchase of jewellery or other luxury assets, unless held as stock-in-trade.

• Speculative activities.

Chapter 8: Financial Services Organisation

Financial Services Organisation explains the role and regulatory framework of financial institutions that support India's financial system. 

These amendments are important for both objective questions and 5–7 marks descriptive questions in the examination

NBFC Net Owned Fund (NOF)

The minimum Net Owned Fund (NOF) requirement for NBFCs has been updated to ₹10 Crore. This minimum NOF is essential for initial registration with the RBI.

NBFC Registration Requirements

Requirements for NBFC registration:

1. Incorporated as a company under the Companies Act.

2. Possess a minimum Net Owned Fund (NOF) of ₹10 Crore.

3. Application submitted on the Reserve Bank of India's 'Pravah' portal. This portal is important to remember.

New NBFC Types (Based on Activity)

New NBFC categories based on activities have been introduced, and an exam question may focus on a short note on one specific type of NBFC.

1. Investment and Credit Company (ICC): Engages in investment and lending business, providing loans and investing in shares and debentures.

2. Stand-Alone Primary Dealers (SPD): Primarily deals in Government Securities (G-Secs) by buying and selling them, providing market liquidity, and participating in primary auctions.

3. NBFC-Peer to Peer (P2P) Lending Platform: Acts as an intermediary connecting borrowers with lenders, facilitating lending and investment.

4. NBFC-Account Aggregator (AA): Collects and shares customers' financial information only after obtaining explicit consent.

Chapter 13: Initial Registration and Licenses (FSSAI)

Initial Registration and Licenses (FSSAI) covers the legal requirements for obtaining registration and licences under the Food Safety and Standards Authority of India (FSSAI). 

These amendments are important from the examination point of view and may be asked in both objective questions and 5–7 marks descriptive questions.

Introduction to FSSAI Amendments

FSSAI (Food Safety and Standards Authority of India) has introduced amendments, specifically the Food Safety and Standards (Amendment) Rules, 2026, to enhance food safety standards and address concerns about unhygienic practices.

Petty Food Business Operator (FBO) Definition

A Petty Food Business Operator (FBO) refers to individuals or entities involved in manufacturing or selling food on a small scale. This includes small retailers, stall owners, mobile food vendors (e.g., pani puri, ice cream, food trucks), and those serving food at social gatherings. Caterers are not included in this definition.

FSSAI Registration Process

The Food Authority grants a registration certificate upon submission of required documents.

1. If an inspection is ordered, the registration certificate shall be granted within 30 days if authorities are satisfied.

2. If no decision is communicated within 30 days of application (and no rejection), the applicant may commence their business.

3. Before rejecting a registration, an Opportunity of Being Heard (OBH) must be given.

4. Upon submission of all required documents, an instant registration certificate will be issued.