Doing business in India is tough – it takes almost 2-3 months to really get the ball rolling (right from incorporation to getting business PAN card etc). But like we shared earlier, Ministry of Corporate Affairs (MCA) has outlined measures to to ensure that entrepreneurs can float a company in 24 hours.
And today, MCA has simplified the company incorporation process under under MCA-21 to enable registration of a company within 24 to 48 hours where there is no difficulty about availability of name etc.
The various elements of this process are;
- Director Identification Number is allotted online on the basis of verification certificate given by the practicing Chartered Accountant or Company Secretary or Cost Accountant.
- New “Name Guidelines, 2011” have been issued whereby the name can be obtained online from the MCA 21 system if the application is certified by the practicing professionals that the proposed name is in conformity with the Name Guidelines.
- Application and payment of fees is made online.
In order to prevent the registration of companies by fake promoters, the Companies Act, 1956 mandates obtaining of Director Identification Number (DIN) by an individual before becoming a director of the company. For obtaining DIN, one has to apply in an e-form giving his full identification such as name, father’s name, address, date of birth and permanent account number (PAN) etc with copy of documentary proof.
The application has to be further certified by a professional. There are inbuilt checks in the system such as checking of given particulars with PAN database to prevent fake promoters from obtaining the DIN.
In addition to above, after allotment of DIN and name online, all such approvals are further re-checked manually by the “back office” and in case any discrepancies are found later on, the process of revocation of DIN and/or company’s name are initiated.
All incorporation e-forms are filed online but checked and approved manually by the Registrar of Companies. [source: this information was given by the Minister of State in the Ministry of Corporate Affairs Shri R.P.N. Singh today in the Lok Sabha in reply to a written question whether the Government proposes to introduce registration of a company within 24 hours and the steps taken to prevent the registration of fake companies under this new computerised system?].