India’s Ministry of Corporate Affairs has announced that it is simplifying the procedures involved in incorporating a company, in order to help budding entrepreneurs across the country.
According to the ministry, entrepreneurs will now be able to incorporate their companies within 24 hrs, which previously took an average of 29 days, starting August 11.
The Ministry said it has already implemented the online approval of a Director’s Identification Number (DIN) from June 12 and name registration for the proposed company was made available online from July 24.
Additionally, the digital certificate of incorporation is being issued by the Registrar of Companies online, provided the application and other relevant documents submitted by a corporate promoter, have been certified by a practising professional. Also, this facility will remain optional for existing applicants who haven’t got any certification done by a practicing law professional.
Expressing happiness over these government measures, Kiran Mazumdar Shaw, Chairman & Managing Director of the global biopharmaceutical giant, Biocon said, in a statement to Economic Times:
This will spur entrepreneurship and kick start the economy. The amount of time consumed in setting up companies is huge deterrence for the entrepreneurial growth.
Other corporate experts, while appreciating this move, suggested that government should also incorporate adequate safeguards to prevent any misuse. Pawan K Vijay, CEO, Corporate Professionals Pvt Ltd said:
It is important for the ministry to explain the guidelines more explicitly since they are used to interpret rules conservatively and professionals may take unwanted risks.