The number of companies registered in F.Y 2020-21 rose by 24.3% as compared to the F.Y. 2019-20 as per the data from the Ministry of Corporate Affairs.
So what pushed more businesses to be registered? Well, it was the Government’s new initiative of Ease of Doing Business.
What were the reforms that led to this push?
As a part of the Government of India’s Ease of Doing Business (EODB) initiatives, the Ministry of Corporate Affairs (MCA) introduced a new Web Form called ‘SPICe+’ replacing the old SPICe form. All companies getting incorporated on or after 23rd February 2020, are required to file SPICe+.
Through SPICe+, a business can offer 10 services by 3 Central Government Ministries & Departments, namely- Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance, and 1 State Government (Maharashtra). This has led to a reduction in company registration fees and also saving procedures and time..
These 10 services include:
- Application for reservation of name
- DIN of the proposed directors
- PAN registration of the company (Mandatory)
- TAN registration of the company (Mandatory)
- PF registration of the company (Mandatory)
- ESI registration of the company (Mandatory)
- GST registration of the company (Optional)
- Professional Tax registration of the company (only in Maharashtra, Karnataka, and West Bengal)
- Opening of Bank Account (Mandatory)
- First time registration of shops and establishments for all new companies getting incorporated in Delhi
Once the company is incorporated, it should comply with certain requirements of MCA. These include:
1. Appointment of Auditor
Upon incorporation, the Board of Directors is required to appoint the Company’s first statutory auditor. This has to be done within a period of 30 days from incorporation by filing form ADT-1. In case the Board fails to do so, it shall be the duty of the members to appoint an auditor by holding an Extra-Ordinary General Meeting. Such an auditor will act as the statutory auditor of the company until the conclusion of the first AGM.
2. Commencement of Business
A newly incorporated company shall not commence any business or exercise any borrowing power unless it has filed a declaration in eForm-INC-20A that every subscriber has paid the value of shares agreed. This declaration should be made within a period of 180 days from the date of incorporation.
Other than post-incorporation compliances, there are certain annual compliances to be done each year. These include:
- Annual General Meeting
- Statutory Audit
- Appointment of Subsequent Auditor
- RoC Forms- AOC-4 and MGT-7
- Board Meetings
- Declaration by Directors- MBP-1 and DIR-8
- Statutory Registers
Seems like when you have the spirit of hustling, even a pandemic can’t stop you from scaling new heights. This initiative of the Government has made the process of starting a business in India very simple and seamless.
Want to register your own business? Check out our plans.