Half a day is all you need to get into business. As per the Ministry of Corporate Affairs, which is leaving no stone unturned to improve the ease of doing business, it will now become possible to reduce the time to reserve the name of company to half a day, and incorporate it in one third of a day.
As per the Ministry’s website, simplified procedures and a reduction in time and fees, through the successful implementation of e-governance initiatives such as the MCA21 portal and SPICe (Simplified Proforma for Incorporating Company Electronically) forms, will make this feasible.
The effectiveness of the policy can be judged from the fact that the time taken for company incorporation was two days in February 2016 and reduced to just about a day in March. Also, the average time for company incorporation along with getting PAN and TAN has been reduced to 1.1 days.
As many as 26 rules have been automated, five procedures for starting a business clubbed into one and many rules deleted to make sure that about 98,000 companies were incorporated from April 2016 to March 2017. 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.
As per the Ministry, these reforms that have been undertaken have helped in reducing the procedures for starting a business in India and provide Ease of Doing Business. This marks almost 60% approximate increase as compared to 2015-16 numbers.
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Also, the fee for incorporation (of the integrated e-Form SPICe /INC-32) has been reduced from INR 2,000 to INR 500. The cost incurred by a company for a company seal is also eliminated as the requirement for a company seal has been removed vide amendment to the Companies Act, 2013.
The website further says that the “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.”
It further claims that more than 90% applications are being approved within one working day.
Additionally, ever since the Ministry of Corporate Affairs (MCA) tied up with the Central Board of Direct Taxes (CBDT) in February 2017, over 20,000 companies have received a Certificate of Incorporation within a day, including their Corporate Identity Number (CIN), Permanent Account Number (PAN) and Tax Deduction Account Number (TAN).
These improving statistics are a testimony to the government’s commitment to improve ease of doing business in India. As per a Mint Report, India is targeting an ambitious 40-notch jump in the World Bank’s Doing Business survey this year.
Last year, its rank rose to 130 in the survey that measures the ease of doing business in various countries. According to an output-outcome framework document prepared by the government, India wants to reach number 90 in 2017-18 and rise to number 30 by 2020.
Read More: Inc42