Indian Government initiative for "Ease of doing Business in India"
If you intend to start your own business or expend your business by forming/Incorporated a new company in India but due to lots of complications in formation of company and compliances to be do after formation you are postponing your plan of setting up a business in India. Now wait is over, please see the below list of benefits that a company can avail in India: –
Benefits available for Setting up business in India
1. Incorporation/Formation related benefits:-
Ø Single form for Incorporation: – Company can be
now formed by filing a single eform i.e SPICe+. SPICe+ is an
integrated Web form offering 10 services. SPICe+ is part of various
initiatives and commitment of Government of India towards Ease of Doing
Business (EODB). This single form will save the lengthy procedures, time and
cost for Starting a Business in India. 10 Services offered by SPICe+ (In
· (i) Company name reservation
· (ii) Incorporation
· (iii) DIN allotment
· (iv) Mandatory issue of PAN
· (v) Mandatory issue of TAN
· (vi) Mandatory issue of EPFO registration
· (vii) Mandatory issue of ESIC registration
· (viii) Mandatory issue of Profession Tax registration (Maharashtra)
· (ix) Mandatory Opening of Bank Account for the Company and
· (x) Allotment of GSTIN (if so applied for)
Ø Zero Government fees for incorporation (In case proposed authorized capital upto Rs. 15 Lakh):- No filing fees will be payable for company proposed to be incorporated with authorized share capital up to Rs. 15 Lakh.
1 (i) Simplification of procedural complications: –
Ø Electronic filing of INC-9 :- Earlier every
subscriber of Memorandum and director of the proposed company have to file a
declaration (INC-9) on a affidavit at the time of incorporation of
INC-9 shall be auto-generated in pdf format and would have to be submitted only in electronic form at the time of filing of incorporation form i.e SPICe+ therefore no need to file an affidavit it will save time and money both.
Ø 2 chances to reapply the application for reservation of name of proposed company: – The proposed company firstly file an application for reservation of name of the company with 2 proposed suitable name to the concern authority and after filing an application if the name get objected by the concern authority. In this case you don’t need to worry you still have two chances to re-apply other proposed names.
Ø No Requirement of Minimum Paid Up capital: – Earlier to form a Private Limited company there is a requirement of Minimum capital of Rs. 1 Lakh/- but now to form your own company and to start your business you don’t need a lot of money you can open it with Rs. 100 only.
Ø Minimum Turnover Criteria:- A Company is just like any other form of business organization which can be started from zero and there is no criteria for a minimum turnover to start up a business as a company.
Relaxations given to companies/LLP in view of COVID-19 outbreak
The Ministry of Corporate Affairs has provided Relief/ Relaxations to companies in order to reduce their compliance, burden and other risks and to give a chance and opportunity to defaulting companies to became legal compliant once again under the Companies Act, 2013.
Below mentioned is the Relief and Relaxations provided to the Companies: –
Ø No additional fees shall be charged for late filing during a moratorium period from 01st April to 30th September, 2020, in respect of document, return, statement etc. required to be filed with the Registrar of Companies(ROC).
Ø Maximum Gap between 2 board meetings now extended to 180 days till 30th September, 2020 (Earlier it was 120 days).
newly incorporated companies have to file a declaration for
commencement of business with the concern ROC within the period of 180
days from the date of formation/Incorporation. Due to COVID-19 now the period
of 180 days is further extended to additional 180days.
Therefore, Declaration for commencement of business (Form INC-20A) can be filed in 180+ 180 (Extra) days.
holders of DINs marked as ‘Deactivated’ due to non-filing of DIR-3KYC/DIR-3
KYC-Web and those Companies whose compliance status has been marked as “ACTIVE
non-compliant” due to non-filing of Active Company Tagging Identities and
Verification(ACTIVE) e-form are encouraged to become compliant once again
in pursuance of the General Circular No. 11 dated 24th March, 2020 & General
Circular No.12 dated 30th March 2020 and
“File DIR-3KYC/DIR-3KYC-Web/ACTIVE -between 1st April, 2020 to 30th September, 2020 without any filing fee of INR 5000/INR 10000 respectively”.
Ø Independent Directors are required to hold a meeting. For Financial Year 2019-20, if they could not be able to hold such a meeting the same shall not be viewed as violation.
of the residency requirement for stay in India for minimum 182
days by at least 1 director of every company shall not be viewed as violation.
Ø Conducting Annual General Meeting (AGM) by companies through Video Conferencing (VC) or Other Audio Visual Means (OAVM):-MCA has provided relaxation to companies to conduct the Annual General Meeting (AGM) of their members through Video Conferencing (VC) or Other Audio Visual Means (OAVM), during the calendar year 2020 which the companies are required to conduct as per Section 96 of the Companies Act,2013
Other Benefits under ease of doing business initiative:
1. No requirement of inspection for before registration under Shops & Establishment Act in Mumbai and Delhi.
2. Companies Act was amended to eliminate the requirement of a common company seal.
Dealing With Construction Permits:
1. Municipal Corporations of
Delhi, as well as Municipal Corporation of Greater Mumbai, have introduced fast
track approval system for issuing building permits with features such as Common
Application Form (CAF), provision of using digital signature and online
scrutiny of building plans.
2. Delhi has uniform building by-laws which allow for risk-based classification regimes for different building types. It has a provision of deemed approval of sanctioning building plans within 30 days.
3. For construction permits, the time reduced from 128.5 to 99 days in Mumbai and from 157.5 to 91 days in Delhi between Doing Business 2018 and 2019 reports.
4. Total number of procedures reduced to 20 in Mumbai and 16 in Delhi.
5. Cost of obtaining construction permits reduced from 23.2% to 5.4% of the economy’s per capita income.
Trading Across Borders
1. The Central Board of Excise and
Customs (CBEC) has implemented ‘Indian Customs Single Window Project’ to
facilitate trade. Importers and exporters can electronically lodge their
customs clearance documents at a single point.
2. The number of mandatory documents required for customs purposes, for both import and export of goods, has been reduced to three.
3. e-Sanchit, an online application system, allows traders to file all documents electronically.
4. The electronic self-sealing of the container at the factory has reduced time and cost for exporting firms.
5. A computerized risk management system has brought transparency and reduced frequency of custom inspections significantly.
6. Central Board of Indirect Taxes and Customs has provided a facility for Advance Bill of Entry (Advance Import Declaration).
1. The Commercial Courts and Appellate Division of High Courts have been established in Mumbai and Delhi.
2. National Judicial Data Grid (NJDG), provides case data including case registration, cause list, case status and orders/ judgements of courts district-wise across the country. NJDG is open for public since 2015.
3. New cases in district courts are assigned to Judges randomly through an automated system in Delhi and Mumbai.
4. e-filing of cases has been introduced in district courts of Delhi and Mumbai. 21 5. A case management tool has been developed with functionality of sending a notification to lawyers, viewing court orders/ judgements, tracking the status of cases, to semi-automatically generate court orders etc.
1. Central Registry of
Securitization Asset Reconstruction and Security Interest (CERSAI) is a
geographically unified electronic registry that provides for registration by
asset type. Since 2017, CERSAI also provides search through debtor’s name.
2. Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) (Central Registry) Rules, 2011 was amended to include additional types of charges, including a security interest in – immovable property by the mortgage, hypothecation of plant and machinery, stocks, debt including book debt or receivables, intangible assets, patent, copyright, trademark, under-construction building.
3. The definition of property, which now includes immovable as well as intangible, allows CERSAI to register these additional charges.
1. Electricity connection is provided within 7 days if no Right of Way (RoW) is required and within 15 days where RoW is required.
2. Service line cum Development charges is now capped at US$ 357.6 in Delhi.
3. Number of documents required for getting electricity connection has been reduced to two and no physical documents are accepted.28
4. Total number of procedures reduced to 3 in Delhi and 4 in Mumbai.
1. All sub-registrar offices have been digitized and its records have been integrated with the Land Records Department, in both Delhi and Mumbai.
2. In Mumbai, all property tax records have been digitized. Property is mutated at automatically after registration. 30 The digitization of property records ensures transparency and allows citizens to ascertain the history of transactions in digital mode.
3. Online service for charges search at Registrar of Companies reduces the time taken for this procedure significantly.31
4. Statistics regarding the number of land disputes at Revenue Courts are available online in both Delhi and Mumbai.
1. The Insolvency and Bankruptcy Code of 2016 has introduced new dimensions in resolving insolvency in India. It is India’s first comprehensive legislation of corporate insolvency.33
2. Under Fast-track Corporate Insolvency Resolution Process (CIRP) for mid-sized companies, the process for insolvency shall be completed within 90 days with a maximum grace period of another 45 days.
1. Reduction of corporate tax from 30% to 25% for mid-sized companies.35
2. Domestic companies can opt for concessional tax regime @ 22% (effective tax rate: 25.17% inclusive of surcharge and cess). Such company cannot claim any income tax incentive or exemption. Such companies are not be liable to pay the Minimum Alternate Tax (MAT)36
3. The tax rate for new domestic manufacturing companies is now 15% (17.01% inclusive of surcharge and cess). Companies that have been incorporated on or after 1st October 2019, making fresh investment manufacturing and commencing production on or before 31 March 2023, may opt for such concessional tax regime. Such companies cannot avail any other income tax exemption/ incentive under the Income-tax Act.36
4. A company that does not opt for the above concessional tax regime and avails any tax exemption/ incentive, shall continue to pay tax at pre-amended rates. However, the option of availing the lower tax regime of 22% can be opted for after the expiry of tax the holiday/ exemption period. Once the same is opted for it cannot be subsequently withdrawn by the taxpayer. MAT rate for companies availing exemptions/ incentives reduced from 18.5% to 15%.36
5. Robust IT infrastructure of online return filing for Indian taxpayers.37
6. The Goods and Service Tax came into effect from 01 July 2017. It subsumes eight taxes at the Central and nine taxes at the State level.38
7. The Employee State Insurance Corporation (ESIC) has developed a fully online module for electronic return filing with online payment. This has substantially reduced the time to prepare and file returns.
8. With the introduction of the e-verification system, there remains no physical touch point for document submission to income tax authorities.
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