The number of companies registered during the first five months of this financial year (2014-15) was 21,260, as against 43,601 companies registered during the corresponding period of the previous year. Month-wise registration of companies is indicated in the Table below:

Table

Number of Companies Registered during first five months of 2013-14 and 2014-15, month-wise:

Month 2013-14 2014-15
(1) (2) (3)
April 9,026 765
May 10,546 1,789
June 8,064 4,801
July 8,784 7,229
August 7,181 6,676
Total 43,601 21,260

 There is no evidence or feedback suggesting that the decline is in any way attributable to “tedious compliance” entailed by the new Act. However, it is a fact that the provisions of Companies Act, 2013 have safeguards against floating “shell companies”. Further, the decline is also attributable to introduction of new e-forms and the time taken by professionals to become familiar with such forms.

About 60% of the provisions of the Companies Act, 2013 entered into force from 01.04.2014. The Companies Act, 2013 and Rules made thereunder contain essential features of good corporate governance which are to be adopted by companies incorporated under the Companies Act, 2013. Almost all policy elements recommended by the Committee on Corporate Governance (Adi Godrej Committee) stands incorporated in the Companies Act, 2013.

An Expert Committee has been constituted by this Ministry recently to (a) review the e-forms notified under the Companies Act, 2013 (b) to suggest changes aimed at simplifications of such forms and (c) removal of difficulties faced by stakeholders.

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Rajya Sabha today. SOurce- PIB)

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Category : Company Law (3466)
Type : News (12705)
Tags : Companies Act (1934) Companies Act 2013 (1706)

0 responses to “50% Decline in Registration of Companies”

  1. Rajesh,Mumbai says:

    Yes, Mr Kanoi, We are also closing our company and have been forced to go for LLP. Forming a LLP will disturb us for a year and keep us in stress as we will have to start from stretch. UPA government has played prank on NDA before leaving and NDA has been trapped in repairing Laws.

    Is n’t it ridiculous that I can not give loans to my relatives like brother who is director of his private company. Does Government want me to risk my money investing in other options like Stock market ?. Banks give 6 to 8% return with money blocked for a fixed time while I am getting 13-14% with Liquidity of Pay on Demand.

    Mr Kanoi, Professionals like you can awaken the government because afterall they are here to assist businesses to grow and not to pamper FII and make laws which forces micro and small companies to shut.

  2. Rajesh,Mumbai says:

    Earlier UPA government has damaged this act beyond repair.

    One of reason for decline is as below.

    In earlier act,Pvt.Ltd.companies were allowed to accept Loans from its Directors, Directors’s relatives and Shareholders.

    As per Draft rules published by govt for New Company act, Pvt.Ltd companies were allowed to accepts loans only from Directors and Shareholders.

    In Notified act, Shareholders were deleted and only Directors were allowed to give loans to company.

    Thus Govt has cheated by backing from published draft rules.

    This govt is busy in repairing many things which was pushed in by UPA intentionally to harass NDA. Business sentiments have been dampening day by day and corruption is increasing as officers is threatening misusing powers given to them.(Income tax Department)

    Above company provision which prohibits pvt companies to accept loans will kill them and with no option but to shut down. Above article only mentions Decline only.In short time, We will see that existing companies will also shut down.

    Suggestion sent to Ministry to restore the provision has fallen on deaf ears.

  3. adv. dr.g.balakrishnan says:

    TOO MANY REGULATIONS WOULD DETER ANY ONE TO FLOAT COMPANIES, AS MANY LLPs ALSO STOPPED REGISTERING. THAT IS BOUND TO HAPPEN.

    VERY SIMPLE REGULATIONS CAN MAKE COMPLIANCE WOULD BE EASIER; EARLIER WE SAID REGULATION RAJ WHAT IS HAPPENING NOW!

    • CA Sandeep Kanoi says:

      THIS IS THE HIGH TIME. GOVERNMENT SHOULD SIMPLIFY THE COMPANIES ACT 2013 AND RELAX THE CONDITION IN VARIOUS ACTS. I HAVE SEEN MANY COMPANIES OPTING FOR CONVERSION OF THEIR COMPANIES INTO LLP SINCE INTRODUCTION OF COMPANIES ACT,2013

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