Corporate affairs: the focus turns to the “ease of going out”
Having made giant strides in facilitating entry and making doing business easier, the Ministry of Commercial Affairs (MCA) has now set itself the goal of making âeasy to exitâ.
Steps will be taken to reorganize processes to facilitate smooth exits, and MCA will make the necessary changes in MCA21 V 3.0 to achieve this, a senior official said. âFor start-ups, it’s very important because they have to try out ideas. If they fail, they should be able to get out easily, âthe official said. Activity area.
India has made huge strides in developing the startup ecosystem in recent years thanks to an enabling regulatory environment and a massive influx of venture capital flowing into the country to support emerging startups. multiply. The Indian start-up ecosystem made a record investment of nearly $ 36 billion in private companies in 2021, as demand for digitization increased exponentially in the context of the Covid-19 pandemic.
Also Read: In the last round: MCA will soon finalize a comprehensive cross-border insolvency framework
MCA had launched in May of last year a version of MCA-21-MCA21 V3.0 based on data analysis to strengthen the application, promote the ease of doing business, improve the user experience and facilitate the seamless integration and exchange of data between regulators. MCA 21, which was India’s first mission mode e-governance project, is an online portal from MCA that has made all company-related information accessible to various stakeholders and the general public. It was initially launched in 2006.
When presenting the Union’s budget for 2021-2022, Finance Minister Nirmala Sitharaman said the government would use data analytics, artificial intelligence, machine learning to launch MCA21 3.0, which will add the ease of electronic review, electronic consultation, e-adjudication and compliance management, among others.
MCA strongly wants companies to file their returns on time and therefore strengthens its e-governance system by upgrading MCA21 versions. âWe want to improve the level of compliance in companies. In advanced jurisdictions, it is at the 98 percent level. We want write-off for default to be minimized as much as possible in India, âthe official said. A few years ago, MCA undertook a giant clean-up that saw it write off more than 3 lakh of failed businesses from its business register.
When asked if MCA would seek to implement an individual insolvency regime in 2022, the official said it is already operational in the case of personal guarantors of companies. For other people, the opening decision will be taken in due course, the official added.
As to whether the system saw an increase in IBC cases during the pandemic, the official said no. âDon’t see any increase in IBC. We also don’t see much pressure on invoking the IBC. I don’t see much coming either, âthe official said.
As to whether prepackaged insolvency will also be extended to large companies, the official noted that stress was more present in MSMEs. âOnly a few MSME cases have been filed. We are monitoring its progress. We have yet to see how the courts administer the new regime. Even though cases are being filed, I don’t think any cases have been finalized yet. We have not yet gained this experience and based on this experience we will take a call (to see if it can also be extended to large companies), âadded the manager.
(entries from KR Srivats)