Entrepreneurial Revolution Is Happening In India.. Now You can Register a Company In a 24 hours!
When World Bank released their ‘Ease of Doing Business report in 2014, India was ranked 142 out of 189 countries, and one of the biggest issues which a new entrepreneur was facing in India was the time taken to register a new company.
Last year, India improved its ranking by 12 spots, but registration process still took time, and it was a bad signal which we gave to the outer world. Last year, Forbes had ranked India a lowly 95 in their list of business-friendly nations.
During the much hyped ‘Startup India Standup India’ program, PM Modi had assured that his Govt. will ensure that the time taken to register a new company is lessened, and it seems that Ministry of Corporate Affairs is right on track on this one.
A pilot project was launched in the month of January, whose main task was to reduce the delay in incorporating a new company. Earlier, it took 2-5 days to get a name approved, and then upto 7 days to register it with payment of stamp duty and other formalities.
With the pilot project running, around 14,000 new companies were formed; out of which 70% took less than a day to get fully incorporated!
The rest 30% were delayed due to issues pertaining to the name selection. In fact, as per reports, this pilot project gained momentum, as more companies were now registered and incorporated within 24 hours. As the system stabilizes, and the process falls into place, Govt. is sure that every new company registered in India would be able to do business within 24 hours.
What Is Changing?
First of all, Ministry of Corporate Affairs has implemented a new automated process to approve registrations, whose base has been established at Manesar in Haryana. Earlier, new entrepreneurs had to seek Registrar of Companies (RoC) for completing the registration process.
Besides, the fully automated process has ensured that the number of steps required to incorporate a new entity in India has reduced to 26 from 39 earlier.
With the automated process kicking in, Govt. wants to further reduce the number of steps, and ensure that the new entrepreneur faces minimum hassle while opening his new company.
What Is Next?
Ministry of Corporate Affairs, along with experts from Infosys are working on a new module, which will further reduce the time and number of steps (procedures) to register a new company.
For instance, in June, Ministry will release a new form for incorporation of a company, which will reduce more steps and this will allow the formation of the new company, even if the name is not determined. A special ‘memorandum of association’ would be generated, which will in-effect allow the formation of the new company.
Note here, that last year, Ministry of Corporate Affairs had already introduced a new form for registering business, which made it super-easy to incorporate a new business.
Besides, officials from Infosys and Ministry of Corporate Affairs are also working on easing of rules, penalties and fines in case any procedure is not followed. Maybe a centralized system would be generated, which can directly take care of such time-taking operations and allow the entrepreneur to stay focus on his business, instead of getting tangled with legal paperwork.
With these new innovative reforms being introduced, Indian entrepreneurs would be now more comfortable to start their businesses in India, rather than in countries like Singapore where the process is more simplified.
Simplified labor rules, which were introduced last year, along with simplified incorporation rule will definitely act as an catalyst for unleashing a new revolution of entrepreneurship in India.