Gone With The Old Ways Of Starting A Company In India
There was a time when incorporating a company in India was an enormous task in terms of time, cost, and compliances like filings of multiple e-forms.
Under the said old regime of filing, the businessmen were required to initiate opening of bank account, issuance of Permanent Account Number (“PAN”), Tax Deduction and Collection Account Number (“TAN”), other indirect tax registrations, etc. only after incorporating their companies which used to cause unnecessary hassle in terms of time and cost in starting a business.
Welcoming New Changes For The Business Community
In the recent years, the Ministry of Corporate Affairs (“MCA” or “Ministry”) has focused on various initiatives for ease of doing business in India and vide its notification dated 22.01.2016 established the Central Registration Centre (“CRC”), specifically for incorporation of new companies so as to provide speedy incorporation related services.
Further to this, the MCA also launched e-form SPICe, which is an integrated platform for all incorporation related filings in which the stakeholders can apply for the proposed name of the Company and Director Identification Number (“DIN”) of proposed Directors, all together with incorporation.
Also, the Ministry integrated its system with the Central Board of Direct Taxes (“CBDT”) for issue of PAN/TAN along with the incorporation and accordingly, the PAN/TAN allotted by the Income Tax Department are being affixed on the Certificate of Incorporation.
Changes Proposed Via The SPICe Form, Explained
Further, after SPICe, the MCA also added value addition for ease of doing business by launching a simple web-based service R.U.N. (Reserve Unique Name) for application of name by using digital signatures.
And in 2019, it integrated its system with the registration of Employer with Employee Provident Fund Organization (“EPFO”), Employees’ State Insurance Corporation (“ESIC”), Goods and Services Tax (“GST”) at the time of incorporation of companies in the SPICe e-Form which streamlined the whole process and helped the stakeholders in reduction of compliances and time taken for starting a business in India.
Moreover, in due adherence with the constant efforts to provide ease of company incorporations and other related services, the Ministry in line with best global practices, shall be shortly deploying an integrated web-based form “SPICe Plus” in place of existing e-form “SPICe” which would provide ten services at one place.
It shall be available on MCA portal w.e.f. 15th February 2020 and would be applicable on all new companies’ incorporating post the said date thereby facilitating them to start their business with less procedures, time and cost.
Below are the 10 services to be provided in one single proposed SPICe Plus form:
Our Perspective On The Proposed Changes
The aforesaid new regime is indeed a good initiative by the Ministry, however, I still believe that there are few gaps in the operations of CRC officials that need consideration and strict monitoring in terms of imparting them good expertise and training so as to avoid delay in speedy process of incorporation of companies which many a times is impeded due to irrelevant remarks received from CRC for resubmission of incorporation forms.
Therefore, the Ministry should, along with the introduction of new initiatives, also endeavor to provide speedy processing of the incorporation forms thereby making incorporation/setting up of entities in India a streamlined and hassle-free process.
Nevertheless, we can also expect that Ministry would enable similar initiatives for incorporation of Limited Liability Partnerships (“LLPs”), thereby simplifying their incorporation procedures along with other facilities like opening of bank account and other compulsory registrations i.e. PAN/TAN etc.
Amrita serves as an Assistant Manager in Coinmen’s Corporate Secretarial Services.