MCA Decriminalizes 63 Offences and Centralizes Strike-Off Process via C-PACE

The Ministry of Corporate Affairs (MCA) has taken several steps to improve ease of doing business and enhance ease of compliance.

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.

The Ministry has centralized the striking off of Limited Liability Partnerships (LLPs) under notification No. G.S.R. 475(E) dated August 5, 2024, by allowing the CPACE to handle e-Forms pertaining to LLP striking off.

With effect from August 27, 2024, eForms for processing LLP striking off through ROC C-PACE were operationalized, and as of November 15, 2024, 3,264 LLPs had been struck off under Section 75 of the Limited Liability Partnership Act, 2008, in accordance with Rule 37 of the Limited Liability Partnership Rules, 2009.

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 Extra-ordinary 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.

The Minister of State in the Ministry of Corporate Affairs and Minister of State in the Ministry of Road Transport and Highways, Shri Harsh Malhotra stated this in a written reply in Rajya Sabha today.