Government of India claimed on Tuesday that it has cut the time required to start a company to just 1 to 2 days from 22 to 30 last year with the introduction of a new system.
The ministry of corporate affairs had, in April last year, introduced a new system called SPICe or Simplified Proforma for Incorporating Company Electronically.
Under this online system, anyone who wants to start a company can fulfil five legal procedures at one go. Besides the actual ‘company incorporation’, these include the generation of a Director Identification Number or DIN for the directors of the company, reserving a unique name for the company, creating a Permanent Account Number or PAN, as well as creating a Tax Deduction and Collection Account Number or TAN.
The PAN is used to pay taxes, while the TAN is used to cut taxes from others on behalf of the government.
It also set up a data processing center known as Central Registration Centre to deal with the e-forms submitted via the SPICe system, found as part of the Corporate Affairs Ministry’s website.
“As a result of this GPR (Government Process Reengineering), the time taken for processing applications by the Ministry of Corporate Affairs and the Central Board of Direct Taxes has been reduced from an average time of approx. 22-30 days (as reported by World Bank in the Doing Business Report 2017) to an average time of 1 to 2 working days, in respect of more than 90% of cases,” it claimed.
The move has also considerably reduced the cost of starting a company, it added, without quantifying the savings.
The ministry has also created a Reserve Unique Name or RUN web service for entrepreneurs who want to reserve their company’s name before starting the process of incorporation.