The recent relaxations in the Companies Act, 2013, notified by the ministry of corporate affairs (MCA) for private sector, such as issue of share capital to reduced compliance burden, has caught the attention of budding entrepreneurs.
As a minimum share capital is no longer required at the time of incorporation, rather than opting for other legal forms of entities – such as limited liability partnerships. The notification issued by the MCA in early June has been placed before both houses of Parliament for approval.
Since December 2000, the minimum share capital for a private company was Rs 1 lakh; now, there is no such requirement. In fact, this particular amendment was notified earlier on May 26 and the stamp duty burden attached at the inception stage has been done away with. Many young entrepreneurs are showing their interest in incorporating private companies.