It’s been an action-packed year, given the procedural changes effected in company law meant to make matters ‘easier’ for business. Yet, for those in business who want to be on the right side of law and truly compliant, the past year has been one of “uncertainty” and “utter confusion”. Reason? The new company law fell short of expectations when it came to reducing complexity.

Making matters worse was the spate of draft circulars issued by the corporate affairs ministry (MCA). A case in point was the draft MCA circular issued in June 2014 when 13 changes were sought to be introduced on norms relating to private companies, supposedly a major effort to reduce the compliance burden. To this day, there is no statutory backing to this proposal.

Clearly, the Registrar of Companies sees itself as an extended arm of the regulator, and not a service provider. Take the case of company incorporation: the current procedure requires both the practising professional and the subscribers to the memorandum (promoters) to provide an affidavit on having complied with the law. The problem is not with providing an affidavit. What’s irksome is that it has to be done on stamp paper and be notarised! When Prime Minister Modi is all for self-certification, why burden those incorporating companies with stamp paper and notarisation? Where is the ease of doing business here? The problem in India is that the regulators do not fully imbibe the philosophy of the government.

An outcome of this approach is that the regulations framed by the regulators are not in sync with the intent of the top leadership in the government. An overzealous approach to ‘compliance’ will not help India break into the top 50 club onease of doing business.

Deputy Editor

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