Monday, August 1, 2011

Simplified Procedures under Company Law

In a string of circulars issued over the last week or so, the Ministry of Corporate Affairs (MCA) has sought to streamline various procedures under the Companies Act so that they can be completed in an efficient and timely manner. These include:
- Online incorporation of companies within 24 hours. This would be significant as very few countries can boast of instantaneous incorporation of companies. 
- Guidelines for submission of reports by Regional Director (RD) / Registrar of Companies (RoC) under sections 391 to 394 of the Companies Act. This would streamline the procedure for accomplishing schemes of arrangement (merger, demerger, etc.) as past experience indicated delays and disruptions during the court approval process where there were dissimilarities in approach of RD/RoC in various jurisdictions.
Other areas where procedures have been simplified include those for (i) obtaining the approval of the Central Government under section 297 of the Companies Act where directors are interested in a transaction; (ii) obtaining confirmation for shifting the registered office of a company from one state to another; (iii) rectification of the register of charges.

These developments, if implemented as envisaged, will certainly ease the conduct of business activities in India.

1 comment:

Amarendra Gogoi said...

I am amazed at this revolutionary step and await with bated breath towards the implementation. Online incorporation within 24 hrs, and no paperwork, a hassle free process to make the functioning of the ministry more efficient.