Central facility to aid ease of entry and exit for business

This initiative is different from the ongoing technological upgrade of the MCA21 portal where companies and limited liability partnerships (LLPs) have to file their regulatory forms. (Mint)
This initiative is different from the ongoing technological upgrade of the MCA21 portal where companies and limited liability partnerships (LLPs) have to file their regulatory forms. (Mint)

Summary

The ministry of corporate affairs is currently giving final shape to the changes needed in the flow of regulatory processes to execute the project.

New Delhi: Plans to centralize decision-making on all regulatory forms filed by companies will be implemented by December with the task being transferred from Registrars of Companies (RoCs) to a central facility, said a person informed about the shift.

Right now, only decisions on applications for voluntary closure are centralized, making exits easier for companies with no assets and liabilities.

“By December, all regulatory forms will be centrally processed. The idea is to ensure ease of entry, ease of exit and ease of living for businesses," said the person, adding that the move will be a major milestone in improving ease of doing business.

The ministry of corporate affairs is currently giving final shape to the changes needed in the flow of regulatory processes to execute the project.

This initiative is different from the ongoing technological upgrade of the MCA21 portal where companies and limited liability partnerships (LLPs) have to file their regulatory forms.

In centralizing decision-making, filings by companies will continue to be done on the same portal but the back-end processing of forms will be moved from RoCs to the new facility. Some regulatory forms have already been put in the straight-through-process (STP) or ‘file-and-forget’ mode, which do not require RoC approvals— only an acknowledgement is needed.

Centralized processing is expected to make decision-making more uniform and objective while improving speed and efficiency. The move was announced in the Union budget this year by finance and corporate affairs minister Nirmala Sitharaman.

Experts said the idea is to create an integrated e-filing platform for the filings under the Companies Act.

“This envisages improving the accuracy of information filed by corporations and will significantly reduce the existing turnaround time taken for processing forms," said Sakshi Dureja, lead, Secretarial Compliance at AKM Global, a tax and consulting firm. Dureja said this aims to keep corporate data more secure.

Centralizing the processing is likely to result in cutting the response time on filings, said Noorul Hassan, Partner at law firm Lakshmikumaran & Sridharan Attorneys. Currently, non-STP forms require approval from the relevant RoC, explained Hassan.

“Once this system is established, it will lead to faster processing of the forms. There will also be uniformity in processing the forms which renders clarity to users. Since, there shall be no user interface, it will reduce corruption. This will also lessen the burden on the RoCs, who may now focus on other activities such as conducting inquires, inspections and investigations. Ultimately, the initiative will propel the ‘ease of doing business’ in India," said Hassan.

For a smoother implementation, knowledgeable and experienced personnel should be deployed for faster processing of forms and resolution of grievances, said Hassan.

A similar centralized processing centre has simplified the processing of returns over a period of time, said Dureja.

“Similarly, the government’s focus is to build the technological framework to solve the anomalies for transforming the corporate environment."

Hassan said that until now, RoCs have been handling grievances of stakeholders. He suggested setting up help desks until the new system is free of technical glitches.

An email sent to the ministry of corporate affairs spokesperson on Monday seeking comments for the story remained unanswered.

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