Revamp of MCA21 site – A news in the air on 20.02.2023
On 20.02.2023, the ministry of corporate affairs is going to simplify the process for corporate reporting, eliminating the need for approval by Registrars of Companies (RoCs) in most of the cases and allowing companies to fulfil their reporting obligations with an online acknowledgement.
The new system, called “file and forget” by policy makers, is part of the government’s ongoing revamp of the statutory filing website, MCA21. Companies can now fulfil most of their statutory filing obligations with an online acknowledgement, equivalent to approval by RoCs.
Of the nearly 100 forms that companies need to file as part of compliance requirements under the Companies Act on various transactions and filing obligations linked to statutory requirements, 56 have been migrated to a new web-based version in January, and an additional 30 web-based forms will be launched soon.
“Among these, the majority of the critical ones, such as allotment of securities or shares, are now out of RoC approval requirement. Online acknowledgement is enough, and they are taken on record under an auto-approval process. Earlier, barring a few, most forms filed by companies used to go to RoCs for their approval,”
The ministry is also setting up a centralized processing centre for corporate filings under the Companies Act, similar to the income tax department’s centralized processing centre in Bengaluru.
“With scaled-up use of straight through processing, the intervention of authorities on corporate filings will come down. Naturally, this will facilitate stakeholders and improve the ease of doing business,”
The move to drop a layer of regulatory control is part of the government’s idea of having “minimum government and maximum governance”. A key factor that helped in this is the use of know-your-customer (KYC) requirements under the new filing system, which identifies one login credential in the ministry’s portal with one individual’s email address and identity provided by either permanent account number (PAN) issued by the income tax department, director identification number issued by the ministry, or the professional identification issued by professional institutes.
The new system, with improved security features and two-factor authentication for incorporation of companies and other filings, disallows multiple login credentials to be maintained by an individual. This has inconvenienced some professionals and prompted finance and corporate affairs minister Nirmala Sitharaman last week to set up a special team to address grievances and monitor issues daily.
The MCA is of the view that filings have now stabilized, and the number of filings this fiscal is at levels comparable with that of the previous year or better. In certain filings, like the reservation of names of companies, FY23 figures are better than the figures in the previous year despite the transition.
Changes in the authentication process for making statutory filings will help check attempts to form shell companies with dummy directors.
Web forms ensure real-time validation of data keyed in by matching them with the MCA database. If something is wrong, you cannot proceed.
