Through establishment of Central Registration Centre (CRC) for processing of Company “Name Availability” (INC-01) eForms and “Incorporation” (INC-02/INC-32 - SPICe) now doing of business is not too hard or complexities as Ease of Doing Business promoted by the Indian Government. The Impact of this change Ratio is comparatively increased as follows:
WHAT ARE MAJOR REFORMS & INITIATIVES TAKEN BY THE MINISTRY OF CORPORATE AFFAIRS (MCA) :
The Ministry of Corporate Affairs (MCA) brought about a transformational change in the company name reservation and incorporation processes by undertaking Government Process Re-engineering (GPR) and setting up the Central Registration Centre (CRC) for processing of Company “Name Availability” (INC-01) eForms and “Incorporation” (INC-02/INC-32 - SPICe).
The project to transform the processing of Company Incorporation e-Forms was undertaken with one clear objective – Applications for Name reservation and Incorporation of a company should be processed and completed within D+1 days (D=Date of Payment Confirmation) in line with Global best practices. The MCA rolled out the first phase of Central Registration Centre (CRC) on 25th January 2016 for processing Name Reservation applications and second phase of CRC for processing Incorporation applications on 28th March 2016.
The GPR exercise is in pursuance of the ministry’s objective of providing greater “Ease of Doing Business” to all stakeholders and has resulted in speedier processing of incorporation related applications, uniformity in application of rules, and eradicating discretion.
The time taken for processing company incorporation applications being reduced drastically from between 5 to 15 working days in June 2014, to an average of 0.6 working days in March 2017. Similarly, the processing time for name availability applications has been brought down significantly from between 5 to 6 working days in June 2014, to an average of 0.4 days in March 2017.
"In addition, more than 90% applications are being approved within 1 working day. This has resulted in speed, greater transparency, uniformity and eradication of discretion."
ABOUT INTEGRATED SINGLE FORM FOR INCORPORATION:
In the year 2016, Ministry has introduced a new e-form named INC-32 - SPICe (Simplified Proforma for Incorporating Company Electronically) in place of form INC-29, on the occasion of Gandhi Jayanti 2016, which provides more functionalities and deals with a single form for multiple services for incorporation of a company (except for Section 8 companies and Producer Companies). These are as follows:
SPICe is a Simplified and Digital form for Company Incorporation.
A Standardized format of e-Memorandum of Association and e-Articles of Association as per Companies Act, 2013 has been created in linked e-form.
Provision to apply for Company Incorporation with a pre-approved Company Name (obtained by first filing INC-1 eform), which is not available in INC-29 eform.
Mandatory DSCs of Subscribers and Witnesses (max 7+1) in SPICe MOA and SPICe AOA instead of Ink signed signatures being done manually in documents attached with INC-29 e-form.
Standardization and machine tracking of changes to standard format made by stakeholders.
Machine readability of forms, speed in Back Office Processing and positive identification of subscribers due to introduction of digital signatures.
INTEGRATION OF MCA21 WITH CBDT Department
The Ministry has electronically integrated the MCA21 System with the CBDT for issue of PAN and First TAN to a company incorporated using the Simplified Proforma for Incorporating Company Electronically (SPICe). Stakeholders submit applications for PAN and TAN at the time of submitting applications for incorporation. The PAN allotted by Income Tax Department is being affixed on the Certificate of Incorporation of the company w.e.f. 01-Feb-2017.
This has resulted in reduction in the number of processes and time taken for Starting a Business in the country.
HOW ITS PROTECTING THE MINORITY INVESTORS
Reduction in procedures:
Five procedures for Starting a Business are now integrated and can be done simultaneously in One step. Using the newly launched integrated e-Form SPICe, stakeholders now apply for Company Name, Company Incorporation, DIN of the directors, PAN and TAN for the newly incorporated company, and avail all FIVE services simultaneously. The requirement of a company seal has also been removed vide Company (Amendment) Act, 2015. Therefore, the reforms undertaken by the Ministry of Corporate Affairs have helped in reducing the procedures for starting a business in India and provide Ease of Doing Business.
Reduction in Cost/Fees:
The fee for incorporation (of the integrated e-Form SPICe /INC-32) has been reduced from INR 2000 to INR 500. The cost incurred by a company for company seal is also eliminated, as the requirement for a company seal has been removed vide amendment to the Companies Act, 2013.
Reduction in time:
The time taken for processing company incorporation applications has been reduced drastically from between 5 to 15 working days in June 2014, to an average of 0.6 working days in March 2017. Similarly, the processing time for name availability applications has been brought down significantly from between 5 to 6 working days in June 2014, to an average of 0.4 days in March 2017. In addition, more than 90% applications are being approved within 1 working day. This has resulted in speed, greater transparency, uniformity and eradication of discretion.
HIGHLIGHTS OF DATA ON MCA
For Any issue with Name Availability Stakeholders are requested to click here
The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. Compliance Calendar LLP and the Author of this Article do not constitute any sort of professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove. Compliance Calendar LLP shall not be responsible for any loss or damage in any circumstances whatsoever.