Entrepreneurs beat Covid blues, company registration jumps by 27%

Indian entrepreneurs showed no sign of pessimism as the registration of new companies during the last financial year jumped by 27%. In 2020-21, the ministry of corporate affairs registered 1.55 lakh new companies against the registration of 1.22 lakh companies in FY 2019-20, an increase of 27% year-on-year basis, writes ETV Bharat's Deputy News Editor Krishnanand Tripathi.

New Delhi: Despite the extremely adverse economic situation created by the outbreak of Covid-19 global pandemic that will cause a 8% decline in the country’s economy this year, Indian entrepreneurs showed no sign of pessimism as the registration of new companies during the last financial year jumped by 27%.

In 2020-21, the ministry of corporate affairs registered 1.55 lakh new companies against the registration of 1.22 lakh companies in FY 2019-20, an increase of 27% year-on-year basis.

Similarly, the registration of Limited Liability Partnerships (LLP) also went up by 17% in the last year. In 2020-21, the MCA registered 42,186 new LLPs against the registration of 36,176 LLPs in FY 2019-20.

“The increase is significant considering the unprecedented situation faced by the country due to COVID-19 pandemic,” said the government.

In a statement, the ministry of corporate affairs said the new registrations were reflective of the Ease of Doing Business initiative launched by the government and according to the ministry tried to minimise the time, cost and the number of procedures required for starting a new business in the country.

“The Central Registration Centre (CRC) continued to function even during the lockdown to enable stakeholders to incorporate new companies and LLPs,” said the government.

Single window clearance for 10 services

In order to minimise the hassles of registering with different Central and State government departments, in February 2020, the MCA launched the SPICE+ platform to integrate 10 different services across three central government departments, the MCA, labour ministry and the department of revenue.

The SPICE+ platform also combined various requirements such as name reservation, company incorporation, director identification number, EPFO registration, ESIC registration, issue of PAN and TAN and services offered by three state governments – Maharashtra, Karnataka and West Bengal.

The SPICE+ platform integrates these seven central government services with the profession tax registration number, bank account number and GSTN (optional) offered by these three state governments.

Regulatory burden on small Cos reduced

The MCA said its initiative to transform the regulatory environment, particularly the decision to change the definition of a small company will further improve the ease of doing business in the country.

The ministry said these measures include the revision of the definition of small companies which has reduced compliance burden on about 2 lakh companies, zero fees for registration of a new company with an authorised capital up to Rs 15 lakh, the decision to promote one-person companies (OPCs), among other things.

The Government said the de-criminalisation of technical and procedural violations under the Companies Act will also improve ease of doing businesses.

India improved its Ease of Doing Business ranking from 142 in 2014 to 63 in 2019, a jump of 79 positions.