Spice+ : Is really an initiative towards “Greater” ease of doing business?
The Ministry of Corporate Affairs have notified that as part of ease of doing business in India, it would be shortly notifying & deploying a new Web Form christened ‘SPICe+’ (pronounced ‘SPICe Plus’) replacing the existing SPICe form where they will be summarizing almost 10 services to save TIME and COST for starting a new business in the form of a Company.
The following 10 services are as follows:
- DIN allotment
- Mandatory issue of PAN
- Mandatory issue of TAN
- Mandatory issue of EPFO registration
- Mandatory issue of ESIC registration
- Mandatory issue of Profession Tax registration(Maharashtra)
- Mandatory Opening of Bank Account for the Company and
- Allotment of GSTIN (if so applied for)
A similar initiative was taken by the Govt when they introduced AGILE form for GST registration which in real sense was not successfully implemented (may be because the integration of various departments was not done before execution or they have not been properly communicated and educated about).
Company usually had to wait for a 20-30 days for GST registration after incorporation if they are submitting details through AGILE form at time of incorporation and hence the companies and professionals did not choose for this form and apply for GST registration only after incorporation with normal process.
It must also be noted that a company is required to take ESI registration only when it has 10 or more employees and PF when 20 or more employees are there. Making these registration mandatory at time of incorporation through this new process will not only create a burden on the company to do monthly or quarterly compliances under PF and ESI laws but also will involve their ample time and cost.
A company which is on ideation stage with only two promoter directors cum shareholders shall not be required these mandatory registration like PF, ESI and Professional tax however with this new regime of incorporation, such companies will have to bear the burden of regular compliances for having these registrations.
The very interesting fact is that the govt is working towards to smoothening the entry of new business in the form of company but on other hand, they are not taking any action to provide them an easy and smooth exit in case the business gets fail.
Instead, the Govt has increased the cost of striking off the name of the company from Rs. 5,000 to 10,000. Further, there is no system to surrender/cancel various statutory registration (which company obtained when it was doing operations) in one go once the company submit striking off form to ROC which results in huge time and cost.
The Govt should think holistically if they are trying to bring a new system. They must communicate and educate about new system to their department first so that the ultimate consumer should not suffer. Unfortunately, it has not been shown in any of the measures taken by the Govt till date for ease of doing business.
There is a difference between “saying and doing”. Saying that we are creating ease of doing business and making it in real, somewhere found missing in this new initiative of the Govt.
(Submitted by – CS Akash Goel, Secretarial Consultant at www.startup-movers.com and owner at Akash Goel & Associates; Mobile: +91-995-367-2781; Email-ID: email@example.com, firstname.lastname@example.org)
Disclaimer – This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be treated as legal opinion and not to be used for rendering any professional advice.