INDIA BUSINESS WORLD - AUGUST 2006
THE MONTH THAT WAS...

NEW COMPANY FORMATION PROCESS : NEW CO BORN IN LESS THAN ONE HOUR

THE process began at 10.41 am and in little less than an hour, at 11.40 am , a software firm was born, creating history in India 's regulatory firmament. On Tuesday, Corporate Professionals eSolution Pvt Ltd got registered from the promoter's own office in an hour, with some synchronised legwork thrown in at two government offices.

Incorporating a company has never been as swift, even globally. It also proves efficacy of the new e-governance regime. Such a process takes about four hours in the UK whereas it is around three days in the US .

The software firm's promoter Pavan Kumar Vijay narrated the process: “With all documents ready, we applied online for the approval of the company's name at 10.41 am . The name was approved in a few minutes. Then the memorandum and the articles of association were stamped and the power of attorney notarised at the Tis Hazari court by 10.50 am . The scanned documents with digital signatures were then filed electronically to the Registrar of Companies (RoC). Soon after, the certificate of incorporation was obtained at 11:40 .” Before the company affairs ministry's e-filing initiative, incorporating a company used to be a torturous process lasting weeks or even months.

The government plans to further simplify the process by introducing an electronic stamping system. “We are sorting out certain issues like compensating states for switching over to electronic payment for stamp papers. Once it is done, incorporation of companies would not take more than 20 minutes,” company affairs minister Prem Chand Gupta said. It is learnt that 17 states have already given an inprinciple approval to switch over to the electronic payment system.

The government may soon make electronic filing mandatory for India Inc from September 15, 2006 . E-filing will be compulsory for all statutory purposes including registration of companies, filing of returns, board composition and capital structure.