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Starting A New Business Is No More Hassle, Improvement In Ease Of Doing Business In India
In Delhi, a company needs to follow 12 procedures to incorporate a company. Mumbai take 14 days as you have to register for profession tax
Photo Credit : Shutterstock
By the end of March this year, government will have some significant improvement in ease of doing business. You can now start a new business in India in six days, compared to the current scenario where it takes 26 days. The change is a result of cutting down the procedures required to start a company. The procedures have been halved to six from 12.
In Delhi, a company needs to follow 12 procedures to incorporate a company. Mumbai take 14 days as you have to register for profession tax.
Among the 190 countries for this index of ease of doing business, India ranks 130 in 2017 up from 134 in 2015; the ranking further deteriorates in terms of starting a new business as India is ranked 155. Since 2015, government has launched programmes that aim at making it easier to do business in India. The efforts yielded results with India jumping 4 places on the World Bank Doing Business ranking.
New Zealand with only half a day has the best track record in the number of days it takes to start a company. In Singapore it takes 2.5 days for the same. In the US it takes 5.5. With India planning to take down the number of days needed to start a new company to 6 days, India will see a huge jump in its ranking and might match these countries.
Ramesh Abhishek, secretary, Department of Industrial policy and promotion said that the government wants to ensure regulation of all companies, including startups, is done in one day. A company has to be incorporated, and then it went to Central Board of Direct Taxes for PAN number followed by TAN number, and the entire process takes 7-10 days, but from the end of March, the entire process will be done simultaneously.
As per the new norms, the six proposed procedures for starting a company would include:
1. Incorporate a company using SPICe Form.
2. Obtain PAN and TAN though a single integrated form.
3. Register with EPFO and ESIC.
4. Open a Bank account.
5. Register with VAT and Profession Tax; online and real time.
6. Register with Shops and Establishment Act
India's first step towards shortening the procedure was in 2011 when establishing an online VAT registration system was introduced. In 2015, India simplified the process by reducing the registration fees. And in 2016, the minimum capital requirement was eliminated and also the need to obtain a certificate to commence business operations was done away with. 2017 will see some structural changes that will help the business environment even more.