The Ministry of Corporate Affairs (MCA) addressed the Lok Sabha regarding the status of the Centre for Processing Accelerated Corporate Exit (C-PACE) and initiatives for improving corporate compliance and ease of doing business. The response highlighted key achievements and measures undertaken since the establishment of C-PACE.
Streamlining the Corporate Exit Process
C-PACE was established via MCA Notification No. S.O. 1269(E) on March 17, 2023, to centralize and expedite the voluntary strike-off process for companies under Section 248(2) of the Companies Act, 2013. Its primary aim is to facilitate ease of doing business by reducing procedural delays.
Since its inception, the following milestones have been achieved:
- Company Strike-Offs: 13,560 companies were struck off in FY 2023-24, and 11,855 companies have been processed in FY 2024-25 (up to November 15, 2024). The average processing time has been reduced to 70-90 days.
- Extension to LLPs: From August 27, 2024, C-PACE also began handling the strike-off process for Limited Liability Partnerships (LLPs). As of November 15, 2024, 3,264 LLPs have been struck off under Section 75 of the LLP Act, 2008.
Measures to Promote Ease of Compliance
The MCA has implemented significant reforms to streamline corporate processes and reduce compliance burdens:
- Decriminalization of Offenses: 63 offenses under the Companies Act and LLP Act were decriminalized to reduce litigation and encourage business-friendly environments.
- Straight Through Process (STP): Over 54 forms now follow STP, removing the need for approval from field offices.
- Integrated E-Forms: The SPICe+ and AGILE PRO-S forms offer combined services such as incorporation, tax registrations, and bank account opening. Similarly, the FiLLiP form facilitates LLP incorporation.
- Thresholds for Small Companies: Paid-up capital and turnover limits were doubled to ease compliance for small companies and LLPs.
- Centralized Systems: Establishment of Central Registrar of Companies (CRC), Central Scrutiny Centre (CSC), and Central Processing Centre (CPC) ensures uniformity and efficiency.
- E-Adjudication Portal: An online platform for adjudicating offenses related to the Companies Act.
Notable Cost and Compliance Reductions
- Zero Fees: For company incorporation with authorized capital up to ₹15 lakh and shifting registered offices.
- VC for Meetings: Companies can conduct AGMs and EGMs through video conferencing.
- Faster Mergers: Expedited processes for startups and small companies, including mergers involving foreign holding companies and Indian subsidiaries.
Listing on International Exchanges
The MCA introduced rules allowing Indian public companies to list their equity shares on international stock exchanges at GIFT IFSC, aligning with global financial markets.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
STARRED QUESTION NO. *15
ANSWERED ON MONDAY, 25TH NOVEMBER 2024/
Agrahayana 4, 1946 (Saka)
Status of Centre for Processing Accelerated Corporate Exit (C-PACE)
*15. SHRI MAHESH KASHYAP :
SHRI PRAVEEN PATEL :
Will the Minister of CORPORATE AFFAIRS……… be pleased to state:
a. the status of establishment of Centre for Processing Accelerated Corporate Exit (C-PACE) for accelerating the strike off process of companies;
b. the details of other achievements made towards bolstering ‘Ease of Compliance’ and ‘Ease of Doing Business’; and
c. the measures taken to promote ease of compliance and ease of doing business?
ANSWER
Minister of Finance & Corporate Affairs (Smt. Nirmala Sitharaman)
(a) to (c) : A statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PART (a), (b) & (c) OF LOK SABHA STARRED QUESTION NO. *15 TO BE ANSWERED ON 25TH NOVEMBER, 2024 REGARDING ‘STATUS OF CENTRE FOR PROCESSING ACCELERATED CORPORATE EXIT (C-PACE)’
(a) : The Centre for Processing Accelerated Corporate Exit (C-PACE) was established vide MCA Notification No. S.O. 1269(E) dated 17th March 2023 to centralize and speed up the voluntary strike off process of companies u/s 248 (2) of the Companies Act, 2013 in a fast-track mode in order to facilitate ‘Ease of Doing Business’ in India.
Since its inception 13,560 companies have been struck off u/s 248(2) of the Companies Act, 2013 through ROC C-PACE in the financial year 2023-24 and 11,855 companies in the current financial year 2024-25 up to 15th November, 2024. The average time taken for processing such applications has come down to between 70-90 days.
Vide notification No G.S.R. 475(E) dated 5th August 2024 the Ministry has centralized the striking off of Limited Liability Partnerships (LLPs) by empowering the C-PACE for processing of e-Forms related to striking off of LLPs, as well.
With effect from 27th August 2024, eForms for processing striking off of LLPs through ROC C-PACE has been operationalized and as on 15th November, 2024, 3,264 LLPs have been struck off u/s 75 of the Limited Liability Partnership Act, 2008 r/w Rule 37 of the Limited Liability Partnership Rules, 2009.
(b) & (c) : To improve ease of doing business and enhance ease of compliance, MCA has taken several steps in the recent past including some major steps as under:-
(i) Decriminalization of 63 offences under the Companies and LLP Acts. While providing relief to corporates, one of the objectives of decriminalization has also been reduction of litigation burden in judicial courts and shifting the prosecution cases towards adjudication.
(ii) Conversion of more than 54 forms to Straight Through Process (STP) which earlier required approval of field offices.
(iii) Introducing e-Form SPICe+ along with a linked form called AGILE PRO-S for providing different services at one place such as Name Reservation, Incorporation, Allotment of PAN, TAN, DIN, EPFO Registration, ESIC Registration, GST number, opening of Bank Account etc. at the time of incorporation of company to start the business immediately. Similarly, new e-Form FiLLiP (Form for incorporation of Limited Liability Partnership) was introduced for providing the same services in a single application.
(iv) Definition of Small Company has been amended by increasing the threshold limit of a small company from having a paid-up capital not exceeding Rs.2.00 Crore to Rs.4.00 Crore and turnover not exceeding Rs.20.00 Crore to Rs.40.00 Crore. Similarly, concept of small LLP has been introduced which is subject to lesser compliances, lesser fee to reduce the cost of compliances.
(v) Setting up of a Centralized Registrar of Companies (CRC) for incorporation to provide uniformity in the incorporation process.
(vi) Setting up of a Central Scrutiny Centre (CSC) for centralised scrutiny of e-Forms filed under STP.
(vii) Setting up a Central Processing Centre (CPC) for centralised processing of specified non-STP e-forms.
(viii) Setting up an e-Adjudication Portal for adjudication of offences related to the Companies Act.
(ix) Zero fee for incorporation of company with authorized capital up to Rs.15.00 Lakh.
(x) Extended fast track process for mergers under the Companies Act, 2013 to include mergers of Startups with other Startups and with small companies, so that the process of mergers & amalgamations is expedited.
(xi) The scope of section 233 of CA-2013 (Fast Track Mergers & Amalgamation through approval of Regional Directors) enhanced. This now also covers merger of a transferor foreign company incorporated outside India (being a holding company) with its wholly owned subsidiary incorporated in India.
(xii) Zero cost for shifting of the registered office of a company.
(xiii) Convening Annual General Meeting (AGM) and Extraordinary General Meeting (EGM) of a company through Video Conference (VC).
(xiv) Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 have been issued allowing Indian Public companies to list their equity shares on international stock exchange(s) at GIFT IFSC.
