Come July and you will be able to register a company in India within 24 hours!
The Ministry of Corporate Affairs (MCA) has set the target date as first week of July for launching a completely digitized service that will allow anyone with all relevant documents and approvals to complete the process of registering a company in one day.
At present, the process of registering a new company takes anywhere between 10 days and a month. This was cited as one of the reasons for India faring poorly in global competitiveness indices is the inordinately long time the government takes in granting permission to set up anew company. The latest World Competitiveness Report of the World Economic Forum ranks India at 51, while China is much higher at 27. Registration of a new company within 24 hours is only one of the many new initiatives the ministry of corporate affairs has planned for the next few months.
The relevant circulars for announcing the required changes are expected soon.
It has decided to streamline the functioning of its oversight mechanism. At present, there are over 75,000 cases languishing in different courts that the ministry has to deal with. Most of these cases pertain to non-compliance of procedures by companies that have ceased to operate. The ministry has decided that it would wind up such insignificant cases through close monitoring and follow-up action in the next few months. The target is to bring down the number of cases pertaining to violation of provisions under the Companies Act to amore manageable figure of 5,000. Ministry officials said it would be possible to close all the frivolous and inconsequential cases that wasted the government™s time, money and energy and focus only on the substantive cases where serious violation of the Companies Act had taken place. The objective was not to spread the ministry™s resources thin, but concentrate on the few cases that needed greater monitoring.
Already, the ministry has taken a firm stance on companies that continue filing various returns and documents even without filing the annual reports, including the balance sheet. Companies that have not filed the last year™s annual report, including the balance sheet, would now be unable to file any other reports electronically. Several companies delay filing their annual reports in violation of the procedures under the Act. This move would ensure greater compliance in akey area of corporate governance, the officials said.