Prime Minister Narendra Modi launched Startup India in 2015 to boost startup business in India and to encourage entrepreneurship. Earlier, people used to be more of a job seeker than a job giver. The basic reason behind this was the trouble one has to go through in order to incorporate company in India.
From registration to allotment of TAN, PAN and DIN, for everything one had to wait for 15-30 days and pay some bribe in addition. The license Raj helped the top business tycoons who where close to the politicians but it lead to the suffering of small businesses in India. To change this condition, PM Modi encouraged transformation in the commerce sector by bringing reforms.
Understanding the whole Story:
India currently ranks at the 130th spot in the ease of doing business. Earlier India was on 155th spot which was considered very poor. The present rank is not good yet one has seen lots of reforms to create a better environment for doing business in India. Adding one more step into it, the center has made few more reforms and has declared to register a company and allot the registration number within 24 hours.
This is a significant step considering the competence we are facing in the world. With the allotment of TAN, PAN and DIN within a day will not only ease the investors but will also reduce corruption.
Some Important Changes that are made:
Simplification of rules to make it more rational and business friendly:
- One need not pay any capital for registering a company.
- Ease of choosing name for the company
- Certificate of Business not required
- Company seal is now made an optional choice
- Fees reduced from 2000 to 500 rupees.
Apart from these steps, the government has also formulated Central Registration Centre to provide services related to registration of company that matches global practices. It also formulated to integrate MCA21 with CBDT for on the spot allocation of PAN and TAN at the time of Certification of Incorporation.
The government also launched Simplified Performa for Incorporating Company Electronically to incorporate company in one day through online means. These steps are one of those many steps that are required to ease the business doing methods in India and to safeguard entrepreneurs and encourage them for taking risks as this is the only way to provide enough jobs to curb unemployment as entrepreneurs are job givers and not job seekers.
Government wants more business in Company format:
Government wants SME sector entities to enter the company format instead of the partnership model. All these initiatives along with income tax incentive of 5% for companies having turnover less than Rs. 50 Crores (As per Budget 2017) promotes the company format for running a business. Government wants the businesses to operate in regulated environment instead of less regulated type of entity formats.