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Incorporate A Company In India In 1 Hour.  Or Not.

By Amit Ranjan

About a year back, I wrote a post on my personal blog (www.amitranjan.com), titled ‘Starting up Business in India– Beware of the ROC redtape!’ (http://www.amitranjan.com/2005/08/12/starting-up-a-business-in-india-%e2%80%93-watch-out-for-the-roc-redtape/) . This was basically a narrative, about how I had to spend three (exasperating) months in getting our startup registered with the office of the registrar of companies (ROC), New Delhi, as a private limited company. I must inform you that, to this day, that post remains the most popular post on my blog, attracting readers from various corners of the world. So much so that, if you Google for ‘Starting a company in India‘, a reference to this post, is ranked number one amongst the 106,000,000 search results that Google throws up.

But, in what can only be described as a mind boggling turn of events, the Economic Times carried a report earlier this month about how it took a software company in Delhi, less than an hour to get their company registered with the ROC office. The software company, Corporate Professionals eSolution Pvt Ltd, got registered from the promoter’s own office in an hour, with some synchronized legwork thrown in at two government offices.

This is how, Pavan Kumar Vijay, the company’s promoter narrated the process: “With all documents ready, we applied online for the approval of the company’s name at 10.41 am. The name was approved in a few minutes. Then the memorandum and the articles of association were stamped and the power of attorney notarized at the Tis Hazari court by 10.50 am. The scanned documents with digital signatures were then filed electronically to the Registrar of Companies (RoC). Soon after, the certificate of incorporation was obtained at 11:40.”

For reading the article, check out this link (http://epaper.timesofindia.com/Repository/ml.asp?Ref=RVRELzIwMDYvMDgvMDIjQXIwMTkwNQ==&Mode=HTML&Locale=english-skin-custom).

The article mentions that the government plans to further simplify the process by introducing an electronic stamping system, which should bring down the time taken for incorporation to 20 minutes. I am lost for words as I read this story…

It’s possible that this is an extreme case but the fact is that, information technology is bringing about a paradigm shift in the way even our governments operate. It is leading to greater transparency, faster throughputs and reduced red-tapism.

Much as we never miss out on an opportunity to criticize the government at the drop of a hat, on this occasion, I can’t help congratulate our government for enabling this. Full marks to them for allowing something like this.

Discussion/ comments that followed this blog post : 

  1.  Girish Narang :
    “Yes! In fact, this is something which can be said to be a world record. We have searched the Internet and nowhere someone claims that a Company has been incorporate in one hour. However, this was a concerted effort to test the newly launched system of Govt. of India (www.mca.gov.in) where the Registrar office has been converted into online registry.

    This has been made possible by Corporate Professionals (www.corporateprofessionals.com). We are a multidisciplinary consulting Company based at New Delhi, India. Earlier, we also incorporated a Company in one hour before launch of online registry.
    We are also advising various national and foreign companies in incorporations, setting up business in India, accounting, taxation, legal and secretarial consulting, etc. “
  2. Amit Ranjan :
    “ Hi Girish,
    Thanks for dropping by at this blog.
    Yes, even if this was a test bed , it was a stupendous effort. I have gone through the process myself and know how things tend to get help up for the smallest of reasons.Congratulations on achieving this ‘feat’. “
  3. Intrepid :
    “ I think it’s also about the cities. For instance, when I registered my firm five years ago in Mumbai, it was a pretty painless process. We enlisted the help of a company secretary, who got all the documents in order, and we simply went to the ROC for the signing formalities. While not exactly 20 minutes, it was more a matter of days than even weeks.”

About the author:

Amit Ranjan heads the Delhi office of a Silicon Valley based software product startup called Uzanto. He writes his personal blog at www.amitranjan.com ; he also authors a blog called Webyantra (www.webyantra.net), where he profiles innovative India centric web startups.   

 



(8/14/2006)
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