MINISTRY OF

CORPORATE

AFFAIRS

i
 DESCRIPTION
NN
The Ministry of Corporate Affairs is an Indian
government ministry primarily concerned with administration of
the Companies Act 2013, the Companies Act 1956, the Limited
Liability Partnership Act, 2008, and the Insolvency and Bankruptcy
Code, 2016.

It is responsible mainly for the regulation of Indian enterprises in

the industrial and services sector. The ministry is mostly run the
by civil servants of the ICLS cadre. The highest post, Director
General of Corporate Affairs (DGCoA), is fixed at apex scale
for the ICLS. The current minister is Nirmala Sitaraman.

The ministry of corporate affairs offers various services such

LLP services
Investor services
Company services
Document related services
FO services…etc
which can be availed from their official website.

In 2006, the online portal of MCA was launched that has

made all company related accessible to various stakeholders
and general public and also enabled secure and easy access to
MCA services in an assisted manner for professionals,
corporate entities and general public.
 ROLES AND
ROLES RESPONSIBILITIES
AND RESPONSIBILITIES

The Ministry is primarily concerned with administration of the Companies

Act 2013, the Companies Act 1956, the Limited Liability Partnership Act,
2008 & other allied Acts and rules & regulations framed there-under mainly
for regulating the functioning of the corporate sector in accordance with
law.

The Ministry is also responsible for administering the Competition Act,

2002 to prevent practices having adverse effect on competition, to promote
and sustain competition in markets, to protect the interests of consumers
through the commission set up under the Act.

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.

The Ministry also has the responsibility of carrying out the functions of the
Central Government relating to administration of Partnership Act, 1932,
the Companies (Donations to National Funds) Act, 1951 and Societies
Registration Act, 1980.
BRIEF PROFILE
BRIEF PROFILE

The Department of Company Affairs was first constituted in 1950s. It

remained either a department or a part of Ministry of Law, Ministry of Finance
or Ministry of Commerce till 2004. It became a Ministry in 2004 and acquired
its present name in May 2007. Under the Government of India (Allocation of
Business) Rules 1961, following subjects are assigned to the Ministry: -

(i) Administration of the Companies Act, 1956/2013.

(ii) Administration of the Companies (Donation of National Funds) Act,
1951 (54 of 1951)
(iii) Administration of the Monopolies and Restrictive Trade Practices Act,
1969 [(54 of1969) Only residual matters]
(iv) Monopolies and Restrictive Trade Practices Commission. (Only
residual matters)
(v) Professions of Accountancy [(The Chartered Accountants Act, 1949(38
of 1949)]; Profession of Costs and Works Accountancy [The Cost and
Works Accountants Act, 1959 (23 of 1959)]; Profession of Company
Secretaries [The Company Secretaries Act, 1980 (56 of 1980)].
(vi) Collection of statistics relating to companies.
(vii) Legislation relating to law of Partnership and the exercise of certain
functions under Chapter VII of the Indian Partnership Act, 1932 (9 of
1932) in centrally administered areas. (The administration of the Act
vests with the State Governments).
(viii) The responsibility of the Centre relating to matters concerning centrally
administered areas. (The administration of the Act vests with the State
Governments)
(ix) Legislation in relation to registration of societies and exercise of
functions under the Societies Registration Act, 1860 (21 of 1860) in
centrally administered areas.
(x) Competition Commission of India. The Competition Act, 2000 (12 of
2003)
(xi) Serious Fraud Investigation Office.
(xii) Administration of Investor Education and Protection Fund Authority
(xiii) Administration of Insolvency and Bankruptcy Code
(xiv) Administration of National Company Law tribunal (NCLT) and National
Company Law Appellate Tribunal (NCLAT)
 ACTS UNDER MCA

THE COMPANIES ACT, 2013

THE LIMITED LIABITLITY PARTNERSHIP ACT, 2018

THE INSOLVENCY AND BANKRUPTCY CODE,

2016
THE COMPETITION ACT, 2002

THE PARTNERSHIP ACT, 1932

THE CHARTERED ACCOUNTANTS ACT, 1949

THE COST AND WORK ACCOUNTANTS ACT,

1959
THE COMPANIES SECRETARY ACT, 1980

THE SOCITIES REGISTRATION ACT, 1860

THE COMPANIES ACT, 1951

 COMPANIES ACT

The Companies Act 2013 regulates the formation

and functioning of corporations or companies in India. The first companies
Act after independence was passed in 1956, which governed business
entities in the country The 1956 Act was based on the recommendations of
the Bhabha Committee. This Act was amended multiple times, and in 2013,
major changes were introduced. By Section 135 of the 2013 Act, India
became the first country to make corporate social responsibility (CSR)
spending mandatory by law.

FEATURES :
• It has introduced the concept of ‘Dormant Companies’. Dormant companies are those that
have not engaged in business for two years consecutively.
• It introduced the National Company Law Tribunal. It is a quasi-judicial body in India
adjudicating issues concerning companies. It replaced the Company Law Board.
• It provides for self-regulation concerning disclosures and transparency rather than having a
government-approval based regime.
• Documents have to be maintained in electronic form.
• Official liquidators have adjudicatory powers for companies having net assets of up to Rs.1
crore.
• The procedure for mergers and amalgamations have been made faster and simpler.
• Cross-border mergers are allowed by this Act (foreign company merging with an Indian
company and reverse) but with the permission of the Reserve Bank of India.
• The concept of a one-person company has been introduced. This is a new type of private
company which may have only one director and one shareholder. The 1956 Act required at
least two directors and two shareholders for a private company.
• Having independent directors has been made a statutory requirement for public companies.
• For a prescribed class of companies, women directors are mandatory.
• All companies should have at least one director who has been a resident of India for not less
than 182 days in the last calendar year.
• The Act provides for entrenchment (apply extra-legal safeguards) of the articles of association.
• The Act mandates at least 7 days of notice for calling board meetings.
• In this Act, the duties of a Director has been defined. It has also defined the duties of ‘Key
Managerial Personnel’ and ‘Promoter’.
• For public companies, there should be a rotation of audit firms and auditors. The Act also
prevents auditors from performing non-audit services to the company. In case of non-
compliance, there is substantial criminal and civil liability for an auditor.
• The whole process of rehabilitation and liquidation of the companies in the case of the financial
crisis has been made time-bound.
 LIMITED LIABILTY PARTNERSHIP ACT

The Limited Liability Partnership Act, 2008 was enacted by the Parliament of
India to introduce and legally sanction the concept of LLP in India. LLP is a
corporate business vehicle that enables professional expertise and
entrepreneurial initiative to combine and operate in flexible, innovative and
efficient manner, as a hybrid of companies & partnerships providing benefits of
limited liability while allowing its members the flexibility for organizing their
internal structure as a partnership. LLP is a legal entity partnership act.

FEATURES:
LLP AGREEMENT
Any written agreement between the partners of the LLP or between the LLP and its partners
which determines the mutual rights and duties of the partners and their rights and duties in
relation to that LLP. It is not necessary to enter into an LLP agreement as per LLP Act, 2008.
In the absence of LLP agreement, the mutual rights of corporates, at least two individuals
who are partners of such limited liability partnership or nominees of such bodies corporate
shall act as designated partners.

ACCOUNTS AND AUDIT

LLP is required to maintain books of accounts for each year on cash basis or on accrual
basis. Accounts shall be audited by Auditors appointed by the LLP. Audit of accounts is
compulsory if turnover exceeds Rs. 40 lakhs in any financial year or contribution by partners
exceed Rs. 25 lakhs.

The Statement of Accounts and Solvency for the year ended 31 March is required to be filed
with the Registrar before 30 October in each year.

PENALTY
Any person guilty of an offence under this Act for which no punishment is expressly provided
shall be liable to a fine which may extend to five lakh rupees but which shall not be less than
five thousand rupees and which may extend to fifty thousand rupees for every day after the
first day after which the default continues.
 INSOLVENCY AND BANKRUPTCY CODE

The Insolvency and Bankruptcy Code, 2016 (IBC) is the law which seeks to
consolidate the laws relating to insolvency and bankruptcy resolution for
corporates, limited liability partnerships, partnership firms, individuals and
other body corporates as may be notified by the Central Government from
time to time. It is a comprehensive law that brings together all the laws related
to insolvency and bankruptcy in India The IBC aims to provide a time-bound
process for resolving insolvency and bankruptcy cases, and it has been designed
to ensure that the interests of all stakeholders are protected2 The IBC
provides for a time-bound process for resolving insolvency and bankruptcy
cases, and it has been designed to ensure that the interests of all stakeholders
are protected. Insolvency arises when the value of assets owned by the
individual or company is less than the value of its liabilities. As against,
bankruptcy arises when it remains untreated for the long term. While
insolvency implies a state of economic distress, bankruptcy is a conclusion.

OBJECTIVES OF IBC
• To consolidate and amend all existing insolvency laws in India.

• To simplify and expedite the Insolvency and Bankruptcy Proceedings in India.

• To protect the interest of creditors including stakeholders in a company.

• To revive the company in a time-bound manner.

• To promote entrepreneurship.

• To get the necessary relief to the creditors and consequently increase the credit

supply in the economy.

• To work out a new and timely recovery procedure to be adopted by the banks,

financial institutions or individuals.

• To set up an Insolvency and Bankruptcy Board of India.

• Maximization of the value of assets of corporate persons

REGISTERING A PRIVATE LIMITED COMPANY
To register a private limited company with the MCA, you
need to follow a specific procedure. Here is a step-by-step
guide:

STEP 1: RESERVE UNIQUE NUMBER (RUN)

The first step in the registration process is to apply for a unique name for your
company. The Companies Act mandates that the name of your company
should not be similar to any already registered with the MCA. To check the
availability of your proposed name, you can use the "Reserve Unique Number"
(RUN) service provided by the MCA. Here's how to do it:

1. Create an account on the MCA portal by visiting the Ministry of

Corporate Affairs website.
2. Once logged in, click on the "Reserve Unique Name" option under
"MCA services."
3. Fill in the required information, including the proposed name of your
company.

Click on "Auto check" to verify the availability of the name.

4. If the proposed name is available, you can proceed to pay a fee of

Rs. 1000 to reserve the name.

STEP 2: OBTAIN DIGITAL SIGNATURE CERTIFICATE (DSC)

To file the necessary forms and documents electronically, you need to obtain a
Digital Signature Certificate (DSC). The DSC serves as a digital equivalent of a
physical signature and ensures the authenticity of the documents filed online.
You can obtain a DSC from certified agencies.

STEP 3: OBTAIN DIRECTOR IDENTIFICATION NUMBER (DIN)

Every director of the company must have a Director Identification Number
(DIN). To obtain a DIN, you need to file Form DIR-3 on the MCA portal. This
form requires basic personal information and supporting documents such as
identity proof and address proof.

STEP 4: PREPARE THE INCORPORATION DOCUMENTS

Once you have reserved the unique name and obtained the DSC and DIN, you
can proceed to prepare the incorporation documents. The key document
required for the registration of a private limited company is the SPICe
(Simplified Proforma for Incorporating Company Electronically) form.
The SPICe form includes information about the company's directors,
shareholders, registered office address, and other relevant details. It also
incorporates the Memorandum of Association (MoA) and Articles of
Association (AoA) of the company. These documents outline the company's
objectives, rules, and regulations.

STEP 5: FILE THE INCORPORATION DOCUMENTS

After preparing the incorporation documents, you can file them electronically
on the MCA portal. Here's how:

1. Log in to your MCA account using your credentials.

2. Click on the "Upload e-forms" option and upload the SPICe form,
along with the necessary attachments.
3. Pay the required fees through the consolidated challan generated after
uploading the form.
4. The MCA will verify the documents and, if everything is in order, issue
a Certificate of Incorporation (CoI) along with a Corporate Identification
Number (CIN).
5. Once you receive the CoI and CIN, your private limited company is
officially registered, and you can start your business operations.
REGISTERING AN LLP
STEP 1: OBTAIN DIGITAL SIGNATURE CERTIFICATE

Before initiating the process of registration, you must apply for the digital signature of
the designated partners of the proposed LLP. This is because all the documents for
LLP are filed online and are required to be digitally signed. So, the designated
partner must obtain their digital signature certificates from government recognized
certifying agencies. Here is a list of such certified agencies. The cost of obtaining
DSC varies depending upon the certifying agency. Also, you should obtain class 3
category of DSC.

STEP 2: APPLY FOR DESIGNATED PARTNER IDENTIFICATION NUMBER (DPIN)

You have to apply for the DPIN of all the designated partners or those intending to
be designated partners of the proposed LLP. The application for allotment of DPIN
has to be made in Form DIR-3. You have to attach the scanned copy of documents
(usually Aadhaar and PAN) to the form. The form should also be signed by a
Company Secretary, Chartered Accountant or Cost Accountant in full-time practice.

Only a natural person can be a Designated Partner of an LLP. Hence, the DPIN can
be obtained by only natural persons and not artificial legal entities like a company,
LLP, OPC, association of persons, etc.

Step 3: Name Approval

RUN-LLP (Reserve Unique Name-Limited Liability Partnership) is filed for the

reservation of the name of the proposed LLP which shall be processed by the
Central Registration Centre. But before quoting the name in the form, it is
recommended that you use the free name search facility on MCA portal.

The system will provide the list of closely resembling names of existing
companies/LLPs based on the search criteria filled up. This will help you in choosing
names not similar to already existing names. The registrar will approve the name
only if the name is not undesirable in the opinion of the Central Government and
does not resemble any existing partnership firm or an LLP or a body corporate or a
trademark.

A re-submission of the form shall be allowed to be made within 15 days for rectifying
the defects. There is a provision to provide for 2 proposed names of the LLP. You
must must apply for LLP incorporation within 3 months of the date of name approval
by the MCA.

STEP 4: INCORPORATION OF LLP

The form used for incorporation is FiLLiP (Form for incorporation of Limited Liability
Partnership) which shall be filed with the Registrar who has jurisdiction over the state
in which the registered office of the LLP is situated. The form will be an integrated
form.

Fees as per Annexure ‘A’ shall be paid.

This form also provides for applying for allotment of DPIN, if an individual who is to
be appointed as a designated partner does not have a DPIN or DIN.

The application for allotment shall be allowed to be made by two individuals only.

The application for name reservation may be made through FiLLiP too.

If the name that is applied for is approved, then this approved and reserved name
shall be filled as the proposed name of the LLP.

STEP 5: FILE LIMITED LIABILITY PARTNERSHIP (LLP) AGREEMENT

LLP agreement governs the mutual rights and duties amongst the partners and also
between the LLP and its partners.

LLP agreement must be filed in Form 3 online on MCA Portal.

Form 3 for the LLP agreement has to be filed within 30 days of the date of
incorporation.

The LLP Agreement has to be printed on Stamp Paper. The value of Stamp Paper is
different for every state.
REGISTERING A PARTNERSHIP FIRM

STEP 1: APPLICATION FOR

REGISTRATION

An application form (Form 1) has to be filed to the Registrar of Firms of the

State in which the firm is situated along with prescribed fees. It has to be
signed and verified by all the partners or their agents. The application form
(Form 1) can be obtained from the Registrar of the Firms office or it can be
downloaded from the respective state's Registrar of Firms website.

The application can be sent to the Registrar of Firms through post or by

physical delivery, which contains the following details:

• The name of the firm.

• The principal place of business of the firm.

• The location of any other places where the firm carries on

business.

• The date of joining of each partner.

• The names and permanent addresses of all the partners.

• The duration of the firm.

STEP 2: SELECTION OF NAME OF

THE PARTNERSHIP FIRM
Any name can be given to a partnership firm. But certain conditions need to
be followed while selecting the name:

• The name should not be too similar or identical to an existing

firm doing the same business.

• The name should not contain words like emperor, crown,

empress, empire or any other words which show sanction or
approval of the government.

STEP 3: CERTIFICATE OF
REGISTRATION

If the Registrar is satisfied with the registration application and the

documents, he will register the firm in the Register of Firms and issue the
Registration Certificate. The Register of Firms contains up-to-date
information on all firms, and anybody can view it upon payment of certain
fees.

An application form along with fees is to be submitted to the Registrar of

Firms of the State in which the firm is situated. The application has to be
signed by all partners or their agents.
CONCLUSION:
The MCA has set up and strengthened institutions for achieving
excellence in service delivery 2. It has also taken several initiatives to
promote ease of doing business in India, such as the introduction of
the Companies Fresh Start Scheme, 2020, and the decriminalization
of minor offenses under the Companies Act, 2013 2.
In conclusion, the Ministry of Corporate Affairs plays a crucial role in
regulating the corporate sector in India. Its initiatives to promote
ease of doing business and strengthen institutions for service delivery
have been instrumental in creating a conducive environment for
businesses in India