company law
The Ministry of Corporate Affairs (MCA) has implemented several key initiatives aimed at improving the ease of doing business and compliance in India. Noteworthy measures include the decriminalization of 63 offences under the Companies and Limited Liability Partnership (LLP) Acts, which aims to reduce litigation and promote adjudication.
The Centre for Processing Accelerated Corporate Exit (C-PACE) has played a crucial role in streamlining the company strike-off process. In the financial year 2023-24, C-PACE processed the striking-off of 13,560 companies, with an additional 11,855 companies processed by mid-November 2024 in the 2024-25 fiscal year. This initiative has significantly reduced application processing times to 70–90 days.
Furthermore, LLP strike-offs have been centralized, with 3,264 LLPs processed as of November 15, 2024. The introduction of e-Forms SPICe+ and FiLLiP facilitated the incorporation of companies and LLPs, enabling reduced compliance costs by expanding the definitions of small entities. Centralized systems, including the Central Registrar of Companies, Central Scrutiny Centre, and Central Processing Centre for non-STP e-forms, have also been established.
To further simplify the business landscape, MCA has undertaken the following measures:
Decriminalization of Offences: Decriminalized 63 offences under the Companies and LLP Acts, alleviating the burden on judicial courts by shifting from prosecution to adjudication.
Conversion of Forms to STP: Over 54 forms have been transitioned to a Straight Through Process (STP), eliminating the need for approval from field offices.
Introduction of e-Form SPICe+: The new e-Form SPICe+ consolidates several services—including name reservation, PAN, TAN, and various registrations—in one application, allowing for immediate business commencement.
Update on Small Company Definitions: The threshold for a small company has been revised, raising the paid-up capital limit from ₹2 Crore to ₹4 Crore and the turnover limit from ₹20 Crore to ₹40 Crore. A similar concept for small LLPs has been introduced to minimize compliance costs.
Centralized Registrar of Companies: Establishment of a Centralized Registrar of Companies aimed at standardizing the incorporation process.
Central Scrutiny Centre: A Central Scrutiny Centre has been created for the centralized examination of e-Forms submitted under STP.
Central Processing Centre: This center is designated for the centralized processing of specific non-STP e-forms.
e-Adjudication Portal: An e-Adjudication Portal for offenses related to the Companies Act has been established to streamline adjudication processes.
Zero Incorporation Fees: Companies with authorized capital up to ₹15 lakh can now incorporate without any fees.
Fast-Track Mergers: A fast-track process for mergers, especially beneficial for startups and small companies, has been extended under the Companies Act, 2013.
Enhanced Section 233: The scope of Section 233 of the Companies Act, 2013 has been broadened to include mergers between a foreign holding company and its wholly-owned subsidiary in India.
No Cost for Registered Office Shifts: Companies can now shift their registered offices without incurring costs.
Virtual Meetings: Companies are allowed to convene Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) through video conferencing.
International Listing Rules: The Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 permit Indian public companies to list equity shares on international stock exchanges at GIFT IFSC.
The strategic initiatives by the MCA reflect a robust commitment to modernizing regulatory frameworks and reducing compliance burdens on businesses. These reforms aim to foster an environment that encourages entrepreneurship and supports business growth in India.