ndia currently ranks 179 in the World Bank’s Doing Business 2014 report on the ease of starting business in India. The crucial part of the report is the incredible time taken for setting up the business i.e. 27 days. Though setting up business requires various steps of be undertaken but the registration of the company is the most important part of the process. Moreover, being the first step towards setting up business, any delay in it, would cumulate the delays further.

Before the introduction of Companies Act 2013 the expectations were ripe that the new law would definitely give a fresh outlook into the time consuming issues connected with the incorporation of company and will certainly bring forth a radically improved process of incorporation. But to the dismay of all , instead of rationalizing the process, Companies Act 2013 has provided for increased procedural requirement for incorporating a company which has further complicated the process and addednumber of days in the setting up of a company.

The Companies Act 2013 in comparison to Act of 1956 provides for various new requirement towards incorporating a company. A glimpse of said additional requirement along with theirpossible impact on the entire process is summarized below.

Apart from the aforesaid factors, another factor which is also responsible for delaying the process of company incorporation is, varied and discretionary practices beings followed by the Registrar of Companies for the registering the companies. For 29 states in India, there are around 22 offices of the Registrar of Companies and in absence of any standard operation procedure (SOP), there are high chances of discrepancies. Practically there have been various such instances where totally different processes are being followed in respect of company incorporation by different Registrar’s even to such extent that in some cases, where a company name is disallowed by a particular Registrar is approved by another.

• Standardization of practices at the office of the Registrar across country in respect of incorporation needs to establish. Other solution can be in form of establishment of central office for handling of incorporation of companies at one place which will also lead to faster processing of forms.
• Setting-up of dedicated help-line for dealing with queries relating to setting up business in India.
• The process of name approval is required to be rationalized. As compared to other developed and developing countries, too much restrictions has been imposed under the name guidelines, which delays the process. Freedom should be given to the entrepreneurs to name their own business subject to necessary restrictions.
• Linking the registration of various tax registration like PAN, TAN, Excise, Central Sales tax and VAT which are essential for doing business with the incorporation process. So simultaneously with the incorporation of company, other required registration can also be generated or MCA can share data of company incorporated with other departments, so that duplication of information for each process can be avoided and processing time can be improved.
• Though MCA is providing the facility of opening corporate banks accounts but it needs to create more awareness about the same along with inclusion of all the banks.
• To reduce the paper work involved, either onus should be on the professionals for verification of authenticity and correctness of all information and documents or instead of taking additional affidavits, declarations etc. on paper, digital signatures of the concerned person should be taken on relevant electronic forms having the aforesaid declaration etc.

Though the existing and Governments in recent past have shown their resolve to work towards easing the process of setting up business in India but still no major step have been taken in this direction. Out of the exhaustive list of reforms which the Government of India is committed to undertake, the reforms related to ease in setting up business should be ranked among the topmost priorities. It will definitely play a pivotal role in enhancing the position of India as a destination to do business and will also add to the economic growth of the country.