The Ministry of Corporate Affairs (MCA) is predominantly concerned with administration of the Companies Act 2013 and the Limited Liability Partnership Act, 2008 and rules & regulations framed there-under mainly for regulating the functioning of the corporate sector in accordance with law. Besides, it exercises supervision over the three professional bodies, namely, Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI) and the Institute of Cost Accountants of India (ICAI) which are constituted under three separate Acts of the Parliament for proper and orderly growth of the professions concerned.
Over the years, MCA has been quite active in amending the existing sections and bringing in new sections to ensure transparency in compliance and reporting norms. This has widened our scope to deal with corporate laws unlike the compliance structure during the Companies Act, 1956 era. The challenging atmosphere with the new laws and provisions for corporate laws has helped us to find new avenues and enhance our expertise in advising corporates in compliance matters.
The MCA is gradually moving from Version 2 (V2) to Version 3 (V3) of the portal. Looking at the current scenario, it could be seen that the transit of the new portal for LLP has failed to achieve ease of doing business when put into action. The tech support companies on whom Ministry entrusted the roll out of new portal has repeatedly failed.
The MCA analyses and publishes the filing done by the professionals on new portal, however, it should also keep a track and analyse the tickets raised by the professionals on the portal which might help to make software development more accountable and responsible. The new portal has focused more on authentication than on actual functionality of the portal.
Challenges While Using the Portal:
- Online filing of e-forms has been a challenge especially with the introduction of V3 system launched by the MCA.
- Issues are faced by professionals while filing e-forms related to payment, uploading and approval which leads to delay in filing and unnecessary payment of additional fees.
- Many time the new introduced sections lacks clarity with respect to reporting and compliance. Professionals need to wait for further clarifications or webinars organised by MCA for addressing the doubts.
Improvement in the online system of filing is the need of the hour. Various technical issues are faced by professionals filing e-forms on account of technical difficulties. Technical difficulties hamper the ease of doing business and sometimes act as a drawback in the minds of the foreign corporations trying to establish a place of business in India.
Recommendations to the Concerns that Could be Addressed to:
- With the increase in digital transactions, data privacy should be introduced in industry favourable manner.
- Highly recommended to establish a 24*7 technical helpline of MCA dedicated to resolve technical issues only with real time solutions.
- Technical committee is recommended to be formed by MCA with external professional of ICSI and ICAI as members to ensure that the issues are resolved on time.
- New systems could be introduced only after testing and ensuring 100% smooth functioning.
- Faster approval mechanisms in line with other countries where real time approval is granted for name reservation and incorporation.
- Incentivise establishment of business in tier-II and tier-III cities and rural India.
- Mapping out the infrastructure development plans and accelerating implementation of those plans in these areas to boost establishment of business units.
- Considering changing work culture, shift towards electronic transactions, the cyber and data privacy/security laws should be straightened.
- Different reporting structures could be introduced, based on the turnover and relaxations to be provided for start-ups in their initial years of business.
- Non-reporting compliances could be made mandatory for selective corporates based on its size, to ensure proper corporate governance.
- Minimum compliances for small corporates so as to ensure that their primary focus lies in business building.
Role Change of the Consultants in Start-Up Ecosystem
The role of consultants has drastically changed with the evolving start-up culture and fast-moving transactions done by the start-ups. The roles involve formation of entity in a time challenging manner, ensuring compliance for all funds raise entered by the start-ups, changes in management, reporting with MCA and advising the correct ways to comply with laws. As the start-ups are growth oriented and fast moving, it has been very essential to ensure the start-ups are compliant with various laws. The role of consultant becomes vital here to understand and advise quickly on the compliance issues for various transactions entered by the start-ups.
For Governance, both, timing and quality are important. If the ecosystem for e.g., portal is maintained in the state-of-the-art working condition then Government can expect and professionals will deliver high quality work within the stipulated timelines as guided by the Government.
