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Ministry of corporate affairs eases rules for incorporating companies
New regulations to cut down on paperwork and reduce incorporation time, which at present is about four weeks, further improving ease of doing business in India
New rules notified by the Ministry of Corporate Affairs (MCA) on Monday will make it easier to incorporate companies in India.
Not only will it reduce paperwork it will also reduce the incorporation time, which at present is about four weeks, further improving ease of doing business in India.
The Simplified Proforma for Incorporating Company Electronically (SPICE) was notified in the Companies (Incorporation) Fourth Amendment Rules, 2016.
The MCA, in its official press release, said “the main objective of launching this e-Format pro forma, SPICE, is to provide speedy incorporation related services within stipulated time frames which are in line with the international best practices.”
SPICE is an e-form, yet another initiative in its Government Process Re-engineering (GPR). This move comes as a part of several measures that the government has introduced over the last two years to improve ease of doing business in the country.
Last year, India ranked 130 among 189 countries in World Bank’s ease of doing business index. This year’s rankings are expected in October.
SPICE is intended to bring ease of doing business on a par with global norms where the incorporation time is as low as one day.
The rules, finalized on 1 October and made available on the website a day later, introduced digital submission of documents for incorporation along with e-Memorandum of Association and e-Articles of Association. The rules also entail the provision to apply for company incorporation with a pre-approved company name.
“SPICE is a remarkable change for companies which will significantly reduce the time of incorporation for new entities helping business to flourish,” said Ravi Singhania, managing partner at Singhania and Partners, a law firm. While use of digital documents will ensure a speedy process, in-person verification for ‘user clarification’ may be a cause for delay, he added.
The changes introduced by the government as a whole showed a movement towards digitization, said Harsh Pais, partner at Trilegal, a law firm.
“This is part of a longer term project to automate and digitize the incorporation process. In context of all the other changes that have happened, the government is gradually moving towards a digitized and automated process. It aims to streamline the process and try and realize things through a single window,” Pais said.
The rules notified come into force on the date of the publishing in the official gazette.
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First Published:4 Oct 2016, 01:04 AM IST
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