New Delhi: The Union government plans to introduce a new system for company registrations in a month that will replace filing over 50 forms in portable document format (PDF) with web-based ones to transform the compliance and statutory filing architecture for businesses.
The new forms will cover every reporting requirement of a new company ranging from reporting details of registered office and directors of the company, seeking commencement of business certificate and various other disclosures. The current forms are likely to remain suspended for about a fortnight during the transition process, according to a person informed about the transition process.
The revamped version of company filings with web-based forms is expected to employ new IT tools to improve user experience and make regulatory oversight of businesses efficient while enabling policymakers to detect financial stress as well as governance irregularities in the corporate sector at an early stage.
The government is likely to come out with a public notice about the transition and the period during which existing forms will remain suspended. Relief is likely to be offered to businesses in terms of extra time for fulfilling their compliance obligations so that the absence of forms for a brief period during the transition does not affect them in any manner, the person cited above said on the condition of anonymity. A similar relaxation was given when a new filing system for limited liability partnerships was rolled out in March.
The ministry is attempting to automate processes to reduce reliance on manual effort and use technology to track down companies that will be charged for non-compliance, explained Sonam Chandwani, managing partner at KS Legal and Associates.
“This will speed up the process and automatically detect any filing errors or other non-compliances by the companies. Since humans are slow and ineffective, and technology will eventually take over, the goal is to keep a close eye on non-compliant entities and act swiftly against those businesses. This is a positive step taken in the right direction," Chandwani said.
The new system for the incorporation of companies is part of version three of the MCA21 portal that the ministry of corporate affairs has started implementing. Once the company registration part is rolled out, the rest of the corporate filing requirements will also be revamped, all of which is expected to be completed by the end of the year, the person said.
Version three of the MCA21 project, among the first lot of mission-mode e-governance projects in the country, has been designed to strengthen enforcement, promote ease of doing business and enhance user experience, according to Nischal Arora, partner, regulatory at business advisory firm Nangia Andersen India.
Arora said it is also proposed to facilitate seamless integration and data exchange among regulators in the country. This version, he said, has additional modules for compliance management, e-adjudication, e-scrutiny and e-consultation. Under the revamped portal, the ministry could identify non-compliant companies, issue e-notices to such non-compliant entities and e-adjudicate them through registrars of companies or regional directors as the case may be. “Thus, aided by emerging technologies such as artificial intelligence and machine learning, MCA21 version three is envisioned to transform the corporate regulatory environment in India," Arora said.
The government generally grants the extended period of time towards regular filings as has been done earlier this year in the case of LLPs and a few other forms, and businesses need to plan accordingly as and when the government issues the notification, he said.
An email sent to the ministry of corporate affairs spokesperson on Wednesday seeking comments remained unanswered at the time of publishing.
The government has established a help desk to streamline the processes and provide support, Chandwani of KS Legal said.
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