Ministry Of Corporate Affairs MCA 21 Abstract: MCA21, being implemented in the Ministry of Corporate Affairs, is one of the e-Governance
Mission Mode Project of the Government of India under the National e-Governance Plan. The project envisages easy and secure online access to all the registry related services being provided by the Ministry of Corporate Affairs, including registration and filling of documents throughout the country for all the corporates and other stakeholders at any time and in a manner that best suits them. The programme is outcome based and focussed on improving the quality of services to various stakeholders concerned with the corporate sector in the country. This paper highlights the objectives of the project, scope of services, strategies adopted in MCA21 to transform the paper-based process to a nearly complete electronic system, the innovative methods used, emergence of best practices in administration which include:- i) empowering the citizens/ stakeholders by providing access to information on companies (G2C Services); ii) B2G Transactions; and iii) G2B Transactions. It also discusses the pre-MCA21 and post MCA21 implementation scenarios. Introduction: The Ministry of Corporate Affairs, earlier known as Ministry of Company Affairs, is concerned with the administration of a wide range of statutes for the growth and regulation of the corporate sector including the Companies Act, 1956 and rules and regulation framed there under. The Ministry has a three tier organizational set up for administration of the Act, namely the Central Government Secretariat at New Delhi, the Regional Directors at Mumbai, Kolkata, Chennai and Noida(U.P.) and 20 Registrars of Companies in various States and Union Territories. The Ministry has taken a number of initiatives to meet the expectations of the Corporate Sector and its stakeholders in a dynamic national and global business environment with a view to bringing about significant transformation in the manner of doing business in India and introduce the concepts of ‘good governance’. These initiatives can be broadly classified into (i) legislative and (ii) administrative categories. On the legislative front, the Ministry has (i) amended the three Acts governing the three Professions of Chartered Accountants, Cost & Works Accountants, and the Company Secretaries for orderly growth of these professions with increased accountability, (ii) notified the Accounting Standards for corporate disclosures in a manner compatible with the internationally followed best practices, (iii) introduced a Bill on the Limited Liability
a reducing trend in the number of employees and the paper-based mode of business transactions with various registries was proving to be inefficient and leading to emergence of undesirable practices. and (iv) taking steps for creation of ‘new look’ office environment that is conducive to improved productivity and client response. On the administrative side. It is particularly relevant at this juncture considering the growth in the number of companies from about 30. Public access to company documents was becoming extremely tedious. (iii) restructuring of the Ministry headquarters for introducing efficiencies. 1956 to provide for a simple. peak filing seasons would witness unending serpentine queues involving a huge waste of time and effort. The project has already been approved in principle by the Planning Commission and included in the 11th five year plan. and (iv) a comprehensive revision of the Companies Act.000 in 1956 to more than 8 lakh at present. forward looking legal framework that enables the growth of corporate sector with effective compliance. MCA21 e-Governance Project: It has been the Government’s endeavor to facilitate the maintenance and growth of a healthy business eco-system that can meet stakeholder aspirations. the initiatives include (i) implementation of MCA21 e-governance project. The Ministry is also working on setting-up an Indian Institute of Corporate Affairs (IICA) to serve as a think-tank. (ii) restructuring of the ROC offices to focus on the hitherto neglected regulatory functions. Piecemeal computerization was not serving the desired purpose. The inherent systemic inefficiencies led to delays in delivery of services and the emergence of undesirable practices impacting
. Offices of the Registrars of Companies (ROCs) were becoming paper dump yards. Exceptionally high growth in the number of companies during last one decade following the policy shift favouring economic liberalization.Partnerships to provide for a new form of body corporate ideally suited for the growth of professional capacity and knowledge based service sector in the country. costly and time consuming as it required physical visits to ROC offices. regulatory functions took a back-seat in the face of increased volumes of work leading to low rate of compliance by the companies and ineffective compliance management and monitoring on the part of the government. company representatives and professionals providing services to the corporate sector were required to physically visit the ROC offices. A number of new office complexes have been planned at different locations and renovation/ refurbishing of the existing offices has been taken up as a part of this drive. capacity building facility and delivery of services in respect of investor education and corporate governance. The Ministry of Corporate Affairs (MCA) has the only authentic information repository on the corporate sector of the country and serves as the registry for all transactions by the companies under the Act and filing of annual and event-based statutory documents.
. MCA Employees: improved productivity and enabled to deliver best of breed services. Therein lies the genesis of the acronym ‘MCA21’.transparency. The possibilities offered by technology to ease and simplify the interfaces between the Government and the stakeholders have been effectively adopted to address this challenge. Government: to ensure proactive and effective compliance of relevant laws and corporate governance. anywhere services. such an approach has been able to bring about a fine balance between facilitation and compliance – as a blend of well-defined goals and performance metrics. MCA21 has by now evolved to provide key learnings on how the finite nature of paper based systems could be overcome especially in a country with continental dimensions like India. Besides simplification and improvements to the current ways of working. Scope of Services There are more than 100 services covered within the scope of MCA21 and the major services categories are as follows: Name Approvals and Incorporation of new companies. It is in this background that the Government decided to take a major initiative to transform the situation in order to meet the expectations of the stakeholders in a globally competitive business environment of the 21st century. The objectives of the program have been succinctly articulated to address the needs of major stakeholders stated as under: Business: enabled to register a company and file statutory documents quickly and easily and in a manner that is convenient and transparent. efficiency is achieved by harnessing the right technology enablers. Geared to provide anytime. Filing of annual statutory returns and grant of all approvals. Professionals: to be able to offer efficient services to their client companies. Financial Institutions: to find registration and verification of charges easy. Objectives / Aims: : MCA21 is an outcome based e-Governance program and the goals are oriented at bringing about significant value to the stakeholders. who were increasingly becoming familiar with the international practices. Public: to get easy access to relevant company documents available in the public domain and get their grievances redressed effectively. end-to-end service delivery oriented solution resulting in speed and certainty of delivery of services. The piecemeal computerization effort adopted in the past has been replaced with a comprehensive. MCA21 is a modernization and computerization program that aims at continuously repositioning MCA as an organization capable of fulfilling the aspirations of its stakeholders in a globally competitive business environment. The gap between the expectations of the stakeholders. and the ground realities in delivery of services was widening.
which ensured the viability of architectural and engineering aspects.Registry reference to public records of companies to citizens/investors. a ‘big-bang’ strategy was adopted in MCA21 to migrate from a paper-based process to a nearly complete electronic system (with the exception of a small number of services where physical non-judicial stamp paper is still involved). Due to the project complexity. each addressing a specific facet of the problem. financial modelling and legal professionals who cohesively addressed the issues during the conceptualization stage. The back office operations in particular have been made completely paperless with the use of electronic workflows and secure digital document repositories. it has adopted a ‘service delivery’ model where the project operator would provide the desired service facilitation through a clearly agreed service level agreement. Interoperability with other Government departments/ ministries/ regulators. re-orientation of work procedures to adapt to a technology enabled environment and migration of associated data for electronic use. Strategies Adopted Given the unique nature of requirements and the type of outcomes targeted in the face of a very broad range of services. The process re-engineering is central to the way the new system performs to ensure speed and certainty in service delivery. Consultative and Team Approach: In addition to the comprehensive. Company Secretaries and Chartered Accounts. Modernization: This involved two specific areas of improvement (a) modernization of offices and (b) process re-engineering including revamping nearly 100 forms for electronic access. these strategies were further broken down into sector-specific strategies. Instead. the cross-functional team also included experts from the business domain. This approach has enabled Government to maintain focus on statutory and value-based aspects of the work while other tasks are largely handled through use of technology.e. Formulation of policies governing the corporate sector. Providing a forum for redressal of investors grievances. Subsequently. Compliance management and effective regulation. Change Management: A number of internal and external change interventions including an
. unambiguous technical specifications (inclusive of a prototype). Platform for implementing new value added services. as explained in the following paragraphs: Service Delivery: MCA21 is a departure from the conventional ‘computerization’ approach involving procurement of infrastructure and project related services. a wide consultative approach was adopted (and continues to be followed) for the development of e-forms with participation from the professional Institutes and practising professionals i.
Finding that the number of Facilitation Centres could still be inadequate. The involvement of professional institutes (Company Secretaries. These include elimination of repetitive data that was being sought from the applicants. To facilitate the transition for the end user.extensive media campaign were carried out over an extended period of time. Innovative Methods Used: An architecture based approach was adopted to define the solution. These documents are available for online access to any user. Simultaneous action was taken to introduce certain amendments to the Companies Act involving key enabling provisions for electronic use and mandating electronic filing. a facility of automated ‘pre-fill’ of essential data that had to be mandatorily used in some of the e-forms. All these could be done using software that was available in the public domain where the end-user did not incur any
. Electronic payment methods using credit cards and Internet banking have been introduced in the system and these co-exist with the traditional challan based payment method over the bank counter. Facilitation Centres were set up at 53 locations to address the issues of ‘digital divide’ free of any charges. especially the smaller companies. the project also involved introduction of a new concept of Director Identification Number (DIN) and building of the director data-base so as to easily identify defaulting directors. This would enable service interactions across other governmental systems as and when they are ready. This feature will help the Government to think ‘out-of-the-box’ in introducing single-window services that span multiple departments. about 4.50 crore pages of legacy documents were digitized and inducted into the electronic registry. a scheme of Certified Filing Centres (CFCs) was introduced wherein the practising professionals were encouraged to provide these facilities against a user charge. In addition. These included permanent documents related to the companies and the subsisting ‘charge’ documents. a feature for automated pre-scrutiny and authentication of the form through use of a Digital Signature Certificate (DSC) in accordance with the IT Act. especially in case of companies that vanish. a feature that can bring about reduction in the number of transactions as well as simplification of work processes. There are number of innovations that have been carried out in the area of electronic forms (e-forms). Chartered and Cost Accountants Institutes) and Industry Bodies right from the initial stage are noteworthy. A building block called the “Gateway” has also been introduced in the solution framework. More than 900 CFCs were approved across the country. thus empowering the investors and citizens at large. Data Migration: In order to enhance the utility of the system and empowerment of citizens and investors.
The introduction of electronic stamp papers. The MCA21 Project implementation commenced with the signing of contact with the selected operator (M/s Tata Consultancy Services Ltd.e. is being currently taken up for resolution. 16 September 2006. thereafter. 2004. The implementation of the project has led to a number of best practices in administration facilitated through the use of ICT. 2006) and completed on 30 July 2006. The Project implementation was commenced on schedule with the launch of the initial pilots at Coimbatore and Delhi in February and March 2006 respectively. thereby making the process completely paperless.additional cost in procuring these software tools. 2007 (for reasons of achieving stability of operations) even though services to the stakeholders had commenced from 18 February 2006 at select locations and from 16 September 2006 from all other locations without any major problems. an operation period of 6 years. This was followed by mandating e-filing of documents by all companies w.) on 01. As the data input in the e-forms is authenticated through use of digital signatures by the authorized signatories of the companies. The selected operator was short-listed in June. Period of Project Initiative / Implementation Initial consulting was commenced in September 2002 and was completed in October 2003 culminating in a full-blown proof-of-concept. which could be launched on September 4.03. Best Practices: 1. Some of the best practices that have emerged are explained in the following paragraphs. a Straight-through-processing (STP) has also been introduced where a large number of documents. which has an external dependency on the States/ UTs. not requiring any approvals. Further. with the exception of Jammu. The Expression of Interest commenced immediately thereafter and the Request for Proposal was floated in February 2004. this data is automatically transferred to the databases directly without any human intervention.f. The viability of this approach is expected to bring about sweeping changes as this could be harnessed fruitfully in a very large number of other e-Governance projects. are taken on record without human intervention with a secure technology driven process. followed by a nation-wide roll-out (12 locations by April. Empowering the citizen/ stakeholder to access information on companies (G2C services):
. 2006 due to connectivity problems. The Project had an implementation cycle of 60 weeks and.2005 after obtaining all approvals from the CNE and the CCEA. The project implementation was provisionally certified on 17 January.
about 4. The solution and steps taken: Realising the problems faced in public access to the company documents. the employees of the Ministry. it would involve the travel costs to the ROC office.) and Annual Returns and Balance Sheets for a period of two years preceding. The stakeholders. Problems encountered: Prior to the implementation of MCA21. It has been estimated that on an average. subsisting charge documents. 50/-) and in many cases the costs for staying overnight at the ROC location if it was geographically at a distant place.).Stakeholders and the legal position: The main stakeholders in respect of the Ministry of Corporate Affairs comprise the companies. the Ministry decided to scan and digitize all the permanent documents of companies (MOA. the existing and potential investors. the professionals (Chartered Accountants and Company Secretaries. The electronic Registry has been further enriched with the e-filing of all the documents in various Registries with effect from the dates of roll-out of the programme and
. the statutory fee (which is only Rs. incidental expenses. The process of inspection being manual and difficult.50 crore sheets of paper have been scanned and digitized and made a part of the electronic Registry. 1956 allows inspection of documents kept by the Registrar by the various stakeholders on payment of such fees as may be prescribed. This does not include the time costs. requiring inspection of these documents. Besides deployment of a battery of employees for retrieval of Document files from the record rooms and presenting the same for inspection by the stakeholder in the presence of the employee (in order to ensure the safety of the records). Space being a major constraint. Regulators (SEBI/ Stock Exchanges/ RBI) and the citizens in general. companies used to file all the statutory documents in physical mode with the Registrars of Companies. In the process. the process of inspection was difficult as the inspecting person was required to take physical notes of relevant documents. the inspection of public documents was a painful experience. the Banks and Financial Institutions. various Government Departments/ Ministries. etc. before the Court or simply being non-traceable). etc. who in turn maintained the same in physical form and make it available for inspection to the interested parties. there were frequent cases when either the stakeholder would be allowed minimal time to complete his inspection or required to come on some other date in the case of non-availability of the Document file of the company (for a variety of reasons such as the file being with an investigating agency. documents containing more than one crore sheet of paper were filed every year. Section 610 of the Companies Act. In terms of costs to the stakeholders. would make physical visits to the offices of the Registrars of Companies (20 in all nation-wide). AOA. Moreover. a large number of stakeholders from the general investing public would hardly take the trouble of accessing public documents before taking their investment decisions.
2006.000 services have been availed using this facility. View Charge Documents: The Charge Register is an important document for the Banks and the FIs besides the company. A potential investor can carry out due diligence by taking recourse to the facility and he is enabled to take informed investment decisions. more than 3. Benefits to stakeholders: As a result of the above facility. This number is only in respect of the services availed for which statutory fee is payable. The Banks and FIs can view and verify the status of charges vis-à-vis the Companies which constitute major borrowers. The facility of inspection of documents granted under section 610 of the Companies Act. a facility of ‘on-demand scanning’ has been provided. Best Practices: 2. The Profit and Loss Account in respect of Public Limited Companies is also available in the public domain.further mandated for the entire country with effect from September 16.33. its Annual Report and Balance Sheets. View Public Documents: Under this window. a stakeholder can view the Index of all the documents of a company available in the electronic Registry and can access the documents on payment of the prescribed statutory fees. The Banks and the FIs used to spend a lot of money on verification of charges in respect of a company. Services availed: The provision of company documents in electronic form and permitting access to these documents on-line has been perceived as a revolutionary best practice in empowerment of the stakeholders of the corporate sector. The problems on account of mis-placement/ non-availability of documents have been fully addressed. B2G Transactions: Companies are required to interface with the Registrar of Companies
. 1956 has now been converted into the facility of ‘View Public Documents’ under the MCA21. As on 14 November 2007. a stakeholder can request for certain documents (subject to availability) to be scanned and made available on-line. the details about its Directors. an existing or potential investor can view the companies’ performance on-line. One does not need to physically visit the offices of the ROCs for the purpose leading to savings in time and financial costs. The number of public view of ‘Company Master Data’ is far higher as this facility has been made available without any charge and for which no record is being maintained. The facility for on-line payment has been made available and the window remains open for a period of three hours at any one point of time. Under this facility. keeping in view that not all legacy records were scanned and digitized. Now this facility is available in respect of all the subsisting charges of a company which can be viewed on-line on payment of statutory fees. The features of this facility are as under:View signatory details: This window permits the citizens to access the data-base regarding the Directors/ Manager/ Secretary of the company and is available without any charge for the present. Further.
registration/ modification/ satisfaction of charge etc. replacement of statutory documents etc. These documents are primarily taken on record of various registries (e.). transactions requiring approvals from the ROCs. All the e-forms were notified under the relevant rules as on February 10. once downloaded. can be filled off-line and uploaded subsequently.(ROCs). Handling large volumes of paper was a major problem in the back offices and there were complaints on account of all sorts of undesirable practices such as loss of paper documents. transactions wherein the companies are required to respond to the references from these agencies as a part of compliance management and regulation. 2006. re-engineering of the business processes involved conversion of physical forms into electronic-forms. In certain cases. incorporation. Delivery of services in a transparent and efficient manner had become a major problem. transactions in which the companies are required to file certain documents as a statutory requirement but not requiring approvals. These interactions could be grouped under three broad categories viz. all filings by the companies were in physical paper mode requiring a stakeholder or his representative to physically visit these offices or send the same by post. special resolutions etc. Process re-engineering: E-filing of all documents from B2G was conceived as an alternative. As a first step. Difficulties and problems: Prior to the implementation of MCA21. There have been instances when these documents were not posted in the respective D-files for years at end. The papers could not be tagged on to the Document files (D-files) of concerned companies in time due to peak filing season rush and shortage of staff. change in Directors.g. increase in authorized capital. RDs and the Central Government (e. change in registered office address. This exercise led to reduction of forms from 75 to 61 in the first instance.The e-forms are available on-line and can be filled both on-line as well as off-line after downloading the same from the portal. A check on the quality of filings (correct and complete information) had virtually become impossible as the scrutiny of documents was nearly impossible in the face of volumes. Annual Return. Special features introduced The e-forms. the process changes had to be introduced. ante-dated filings. There is a built-in feature of ‘pre-fill’ of certain common fields for which the information is automatically picked up from the
. Balance-sheet.g.). an exercise in optimization has been on-going as a part of the service enhancement. In respect of certain other key forms. name approval. Process re-engineering has been an on-going exercise as changes were necessitated in certain forms after going on-line and the feedback received from the end-users and professionals. the Regional Directors (RDs) and the Central Government in accordance with various provisions of the Act.
Earlier. the usage of on-line system has reached the level of 47% of the transactions whereas 98. Further.database available in the electronic registry. The Banks.5% of the total transactions are being reported by the Banks within the
.e. the system generates a pre-filled challan. These could be paid both in cash as well through DDs/ Pay orders. has been provided. The day’s collections would then be remitted by the ROC in the Bank allocated to the MCA. Banks are given T+3 days to report the payment realization. The most critical information has been placed under ‘mandatory’ fields which means that the system would not permit filing of the documents if any one or more of these mandatory fields are not filled-in. A special facility for multiple ‘modification’ of the contents filled-in the form. a feature of system driven ‘pre-scrutiny’ has been provided which ensures that any information. which has not been filed earlier and which is now being filed for the first time. of which a print-out is taken and the challan is presented at the payment counter of one of the 399 authorised bank branches for remittance. As on 31 October 2007. Any new information filed through these e-forms automatically updates the database of the company. before it is uploaded. if a company files Form 32 (pertaining to change in directors) to inform cessation of a director. The service-seeker is prompted to select between the ‘off-line’ or ‘online’ mode of payment. If one opts for ‘on-line’ payment mode. Once the stakeholders selects the ‘off-line’ mode of payment. For instance. This gives an opportunity to the stakeholders to verify and make changes in the contents before ‘submission’ of the e-form so as to ensure that the correct information is being filed. The ‘off-line payment’ system delays the initiation of work-item to the extent of time taken by the Banks in reporting payment realization to the MCA21 system. Though the system of payment acceptance at ROC offices was stopped with the roll-out of MCA21. both options i. the conventional challan-based off-line payment and the on-line payment systems were introduced. the fees were paid at the counters in the offices of the ROCs set-up for the purpose. report this to the MCA21 system upon which the work-item is initiated to the back-office for processing. Problems and risks associated with this system were obtaining here as well. on realization of payment. the system will not permit the filing if the information regarding appointment of the said director had not been filed by the Company. would be captured. the system gives him the option to select the ‘credit card’ or ‘internet banking’ and a receipt is generated on authorization of payment in the electronic mode. The benefit in on-line mode of payment is that the payment realization is reported instantaneously and minimum time is taken in initiation of the work-item and the resultant immediate processing. Payment of statutory fees: Filing of documents by the Companies entails payment of statutory fees. The system of payment of statutory fees has been re-engineered as a part of the overall process.
Thus the identity of the signatory is fully established except in case of signatories from the Banks and FIs whose database is not being maintained by the Banks and the FIs at any central location.e. provision for multiple DSCs has been made. 2008 for all services except for the ‘incorporation’ of Companies where both the options are proposed to be continued. Form 8. the period from September to November constitutes as the peak filing season for the companies in respect of these documents. April. this feature has been introduced with effect from July 01. which is verified by the system against the DIN database created in respect of the Directors and the professional’ database taken from the respective institutes of Chartered Accountants. This saves any congestion/ chocking of the system in the back offices when these documents are filed. which are valid for multiple applications. Role-check: Further. As a result. These documents can be retrieved from the electronic Registry for view as
. The Ministry is considering mandating on-line system of payment w. For instance. which pertains to the registration and modification of charge. As the ARs and BSs do not require any approval. The e-forms have to be digitally signed by the authorized signatory(ies) before filing the document and. The stakeholders can obtain their Category-II DSCs from any of the 7 Certification Agencies. The signatory is now required to register his DSC on the portal. a system of straight throughput of these documents into the electronic registry has been introduced.f. Now. These documents become due for filing within a period of 60 days and 30 days respectively of the holding of AGM by the companies. a large number of companies hold their AGMs in the months of August and September and the filings become due in the months of September/ October. contains a provision for DSC of the authorized signatories both from the Company as well as the Bank/ Financial Institution. Steps are under way to find a resolution for this group of signatories also. it was observed that even though the documents are being filed using DSCs. Company Secretaries and the Costs and Works Accountants. The use of DSC based filings ensures the integrity of the document and non-repudiation on the part of the stakeholder. Integrity and security of documents: use of DSCs In order to ensure the non-repudiation of authenticity of the documents filed and provide for features for integrity and security of documents filed. Straight Throughput Process (STP) The companies are required to file their Annual Returns and Balance Sheets every year under the statute. The companies are also required to hold their AGMs within a period of six months of the closure of their accounts (normally co-terminus with the Financial Year). the use of Digital Signatures (DSCs) has been mandated. the ministry had no way to verify the antecedents of the signatory. wherever required.stipulated time-frame of T+3 days. 2007 whereby the system of role-check of the signatory has been implemented. Thus.
Benefits: Introduction of the system of e-filing has helped in resolution of most of the problems in a substantial manner. Sr.Average portal hits per day1. Elements of speed.Maximum Number of Documents Filed on a day (29.e.00 am to 5.Number of Balance Sheet filed 4.per requirement.85 lakh 7.Online Payments (By number)About 47% 13.242 4.33 lakh 8. as the case may be. 034 6.Number of Annual returns filed4. Weekends or holidays are no longer relevant as the services are available on a 24x7x365 time frame.636 3.Total Work Item Pending Re-submission16.05.00 pm to 24 hours.Total DSC Registered203. by the ROC staff or the public. An exercise is in hand to bring in a few more documents within the fold of the straight throughput process.Total filings done till date31.Company records viewed online 3. G2B Transactions: The Ministry of Corporate Affairs is responsible for a number of functions vis-à-vis the corporate sector.98 lakh (1. One of the primary responsibilities of the Ministry pertains to administration of the Companies Act. 1956.Nov 2006)6. of Work Items Initiated12.066 ROC Offices 1.22 lakh for last financial year 9.68 lakh (91.Number of DIN-3 filed3. be it office or home at any time and from anywhere. certainty and integrity in filing of documents are in place.Total Work Item Pending User Clarification24.Total no. Record management is automatic.Peak Portal hits (29.7 million 2. No. Filing times have extended from 09.E-filing through VFO93% 12.582 4.Nov 2006)36.19 lakh 5.771 2. (ii) the Government responds to the requests for approvals by way of service delivery and regulates the
.52. They can do so from their virtual offices. It involves a two-way work flow process i. (i) the companies are required to seek a number of approvals from the Government and file documents/ returns as stipulated under the statutes. The stakeholders are no longer required to physically visit the ROC offices and queue-up for filing their documents.5 million 3.Total no. paper has largely been replaced by digital records and there is no question of ante-date filings or loss or substitution of documents.260 for last financial year 10.Total DIN issued till date 6.60 lakh 11. of Work Items Approved11.Name of the ServiceName of Users 1.784 Best Practices: 3. The programme has been received very well by the stakeholders.Companies registered online82.
which has been addressed along with the first part through this initiative. The stakeholders are enabled to monitor and follow up the transaction status.00 lakh in 2007. supervised through four RDs throughout the country.g. regulation and enforcement took a backseat. poor compliance rate. Expectations: G2B services. reduced these offices only to the delivery of essential services and thereby compliance management. corruption and inefficiencies. Regional Directors (RDs) and the Central Government in the Ministry of Corporate Affairs (MCA) in a decreasing order. The stakeholders have a smooth access to the public records. Pre-MCA21 Status: The main interface points for the stakeholders in the process of administration of Companies Act. cost-effective and render compliance easy. delays in delivery of services. < Post-MCA21 Implementation: The implementation of MCA21 has provided an enabling environment for the stakeholders to approach the Government for seeking the complete basket of services in an easy and transparent manner.corporate sector in terms of compliance and enforcement of the provisions of the Act. The corporate sector has shown a tremendous growth since 1990s. in a healthy business eco-system. There are 20 offices of the ROCs. The processes are simple.000 in 1956 to about 2. The level of staff in these offices today is lesser than what it was in the year 1994. The services are delivered in a transparent manner with speed and certainty. The number of companies increased from 30. the Government decided to take up an end-to-end outcome based service delivery initiative in the form of MCA21 e-Governance project. The work flow process gets completed only with a similar response mechanism from the Government side. 1956 are the Registrars of Companies (ROCs). Increase in workload with the increasing number of companies and the staff strength not keeping pace matching with the increased workload.00 lakh by 1990 and it has now crossed the mark of 8. The first part has been explained separately whereas the second part of the workflow process is being explained here. Professionals (Company Secretaries and Chartered Accountants) came under severe pressure to build up their relations with the staff in these offices for delivery of services to their clients. assume the fulfilment of the following expectations:The stakeholders are enabled to approach the Government in a hassle-free manner. This situation led to emergence of all sorts of undesirable practices e. The first part would fall in the category of B2G transactions while the second part would fall in the domain of G2B services. The main features of this process are explained in the following paragraphs:
. Faced with this scenario in an emerging globally competitive business environment.
The status of total number of documents filed. The work items appear on the Desktops of the Dealing Hands following a system of allocation of works in FIFO (First in First out) mode. The number of items under PUCL or
. Track transaction status and response mechanism The stakeholder is in a position to track the transaction status at every stage from the payment status to the processing and ultimately to the approval status. the work items remain parked in the front portal till the realization of payment of statutory fees is electronically confirmed by the Banking system to the MCA21 system. Assured payment of statutory fees The system has helped streamline the realization of statutory fees. 2006 and further to Rs.038 crore in March. The analysis for the month of August shows that more than 60% of the requests are being processed/ approved the same day. the RD and the Ministry Headquarters. Most of the processes have been confined to two levels as against multiple levels earlier with an option to move the work item to the Head of the Office. either recommends it for approval to the AO or records the deficiencies/ clarifications required. again electronically. after examination.Initiation of work items: Once the stakeholders file their requests through the prescribed e-Forms along with complete documents/ attachments. the next item on his Dash Board appears before him. 2007. This is a significant improvement over the earlier system when the stakeholder would just not know the status of processing of his request. 474 crore in March. The Dealing Hand. 728 crore in March. if any. wherever required. Time taken in delivery of services The time taken in delivery of services has shown remarkable improvement. Though there are a number of factors (overall buoyancy in the economy and improved compliance rate) responsible for increase in revenues. it is noteworthy that the total revenues contributed by the Ministry have increased from Rs. The clarifications/ queries. Those meeting the approval standards are pushed on to the AOs. are automatically communicated to him so as to enable him to respond. It follows a ‘Push’ model which means that the moment the Dealing Hand has cleared one item. approved and closed. Regular central monitoring in this behalf has paid rich dividends. The implementation of e-governance has enabled plugging the leakages. The items categorized as PUCL (Pending User Clarification) or ‘Resubmission’ on account of deficiencies get conveyed to the stakeholder in his e-Box. the number of documents processed and approved with aging analysis is monitorable at all the three levels of the ROC. the work item is ‘initiated’ and made available in the ROC office portal (back office) for processing by the Dealing Hands (DH) and the Approving Officers (AO). The moment the payment realization is confirmed. especially in the cases of payments on account of increase in authorised capital of the companies. Any scope for miscalculation or underpayment has been obviated as the fee payable is calculated through the system. 2005 to Rs. 1.
though the actual progress being achieved on an average is better than the timelines prescribed in the Citizen Charter.000 data correction requests have been filed by the companies while an equal number has been covered through a suo-motu exercise by the ROCs. has undergone a complete transformation. it is capable of sharing information with other Government Departments/ Ministries/ Regulators on the corporate sector of the country and introduction of joined-up services in due course of time. Once the other Departments implement their e-governance programmes. A major drive for data correction and validation has been taken up on top priority. More than a lakh of defunct companies have been identified in the system and the process for
. Finance Intelligence Unit (FIU-IND). Best Practices: 4. It could eventually lead to single stop services. the MCA21 system is built with interoperability options. Other Major Benefits: Efficient record management Record management of the documents filed in the Registries. Department of Economic Affairs. have been revised downwards by 50%. as provided in the Citizen Charter. Now. The time-lines for delivery of services. and have set-up their gateways. For instance. Efficiencies achieved in respect of major services are brought out in the table enclosed as Annex-1. More than 80. A beginning has already been made with free access to company documents having been allowed to the following: Reserve Bank of India. Now. the companies can view their Master Data and have been enabled to point out the inaccuracies in the data for correction to the ROCs. Intelligence Bureau. 2008 when the Registry would be able to claim a reasonable degree of integrity of the database on the corporate sector of the country. it is automatic and the electronic Registry is set to be enriched over a period of time. However. It is planned to complete this exercise by March. Data integrity – Cleaning and validation: The implementation of MCA21 has enabled the Ministry to recognize the dimensions of problems associated with the integrity of the database. which was a major area of concern earlier. the scope for extending this is enormous in times to come. The access has been permitted to the designated officers of these offices through a secure DSC based log-in.Resubmission categories is only about 4 to 5 per cent of the total number of work items initiated across all the Registries. the corporates could be required to file their balance-sheets only with the MCA dispensing with the need for filing the same with the Income Tax Department as the MCA data could be shared with the Revenue Department. G2G Services and linkages: With a forward looking architecture of MCA21. Central Statistics Organisation.
99.65%)49812 (29.99.97%)36274 (54.73%) 4.00 lakh to Rs.000 companies have been placed under the categories of ‘Struck-off/ Dissolved/ Under Liquidation/ Amalgamated’ etc.40%)26805 (40.99.2006 and 31. An Action Plan has been put in place for further improvement during the current Financial Year.2007 Sr. Improvement in compliance management It has become possible to manage the compliance of statutory obligations by the companies.Rs.00 lakh to Rs.06%)34759 (13.99.57%) 5.03. 5. No.16%)31897 (60.03. 49.59%)64107 (40.Rs.72%)23647 (44.41%)33468 (19.striking off their names under Section 560 of the Act has been taken up in the form of another drive.32%) 3.99.89%)53129 (20. 50. 25. of CompaniesNo.Rs.56%)31354 (18. Compliance status as on 31. Filing of Annual Returns and Balance Sheets have registered an increase of more than 60% during one year as is brought out from the following table.999/-66433 (8.999/-170335 (21.999/-253407 (32. 4. Already.60%)36252 (54.50%)20813 (39.00 lakh to Rs.92%)46384 (29.Rs. 99.02%)31949
.24%)49943 (29. of ARs and BSs filed during 2006-07 BSARBSAR 1234567 1. 9.47%)42868 (27.Up to Rs.24%)63889 (40.Range of Authorized CapitalNo.35%)23894 (35. more than 81.72%)32667 (12. These initiatives could not be thought of in the pre-MCA21 environment.999/-157402 (19.97%)53033 (20.00 lakh to Rs. This would significantly purge the registry of avoidable administrative burden. 10. 24. of ARs and BSs filed during 2005-06No.93%) 2.999/-53143 (6.
Registration of other documents filed with ROCs60 days60 days i)Annual Filings (Annual Returns and Balance-sheets)60 days60 daysTaken on record online ii)Form 32 (Change in Director)60 days60 days55%27%9% iii)Form 18 (Change in Regd.89%) Best practices have emerged in a number of other areas.07%)59056 (65. These are proposed to be documented as an on-going exercise during the year and will be shared with the Department of Administrative Reforms in due course of time. Office Address)60 days60 days69%15%3% iv)Form 5 (Increase in Authorised Capital)60 days60 days17%34%19% 7.Application for registration of a company – Section 33 including issuance of Incorporation Certificate (Form 1)10 working days15 days81%7%2% 3.Rs. as a part of the ‘Restructuring of the Action Plan’ for 2007-08. Data Correction and Validation. 1. Striking off the names of defunct companies under Section 560 of the Act.34%)41397 (46. 19563 working days7 days15%45%14% 2.(60. the field offices have been advised to adopt any one area of public governance out of the following major identified tasks and excel in that area in terms of performance: Service Delivery.19%)36542 (40.Registration of charges.Issue of certified copy of documents – Section 610 5 days10 days2 days (average) 6. NoParticulars of power and functionsPeriod as given in the Citizen CharterTime taken pre-MCA21Time taken post MCA21 implementation (showing in percentage terms) Same day2-3 days4 to 5 days 1. Annex-I A Comparative Statement showing the efficiency improvement in delivery of Services under MCA21 Sl.Application for approval of name of a proposed company – Section 20 of the Companies Act. As a matter of fact.Inspection of Public DocumentsManual and time-consuming process requiring physical visits to ROC officesOn-line facility available through the Internet for all electronic documents (including those
.00 crore and above89632 (11.12%) 6.77%)59220 (66. 57215 working days15 days15%45%14% 4. modifications and satisfaction – Section 125 and 141 (Form 8)2 working days10-15 days22%47%13% 5.Application for change of name of a company – Section 21/31 and Section 43A(4).
legacy documents digitized)