MCA21 e-Governance Project

of

Ministry of Corporate Affairs

Government of India

Presentation for CRF 2011

09.05.2011-12.05.2011

1

Vision and Charter

Vision

To facilitate corporate growth with enlightened regulation.

Charter Administration of

- Companies Act, 1956

- Limited Liability Partnership (LLP) Act , 2008

- Competition Act, 2002

- MRTP Act, 1969

- Partnerships Act, 1932

- Societies Registration Act, 1861

- Chartered Accountants Act, 1949

- Cost & Works Accountants Act, 1959

- Company Secretaries Act, 1980 2

Organisation structure & Functions

Organisation set-up

1. MCA – Head Quarter

2. Office of DG(CA) - being established

3. Field offices

• 6 Regional Directorate

• 20 Registrars of Companies

• 19 Official Liquidators

Functions1. Regulator

• Enforcement

• Inspections/Investigations etc.

2. Service delivery of regulatory action

• e-Governance

• Approvals

3. Develop Regulatory Framework

• Legislative proposals

4. Corporate Governance

5. Investor Education and Protection 3

Corporate Growth (beginning 1956)

Year Number

1957 29357

1960 26897

1970 29009

1980 56493

1990 202128

2000 542434

2010 (P) 84643429357 26897 29009

56493

202128

542434

846434

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1957 1960 1970 1980 1990 2000 2010 (P)

Number

4

Rapid Corporate Growth - Issues

Limited number of MCA offices and

manpower against rapid growth of

companies

Long, unmanageable queues

Slow manual collection & verification

process

Payment options limited

Paper sorting, storing/retrieval are

very cumbersome, time-consuming

and error prone

Information availability to stakeholder

is time consuming and error prone

Inadequate compliance monitoring

Quality deterioration in delivery of

services 5

Advent of MCA21 on 3 propositions

6

1. e-Governance is not about ‘e’

… but about Governance

2. e- Governance is not computerization

… it is the transformation of the

way Government serves its

citizens & businesses

3. e-Governance involves adoption of a

holistic approach to provide services

MCA21 is designed to be a true

e-Governance project in all respects

Business Drivers – the need for MCA21

• More than 700,000 corporates

• About 6 crore pages maintained in files

• One lakh charge registrations per year

• Millions of corporate representatives visit ROC office every year

• Physical presence of company representative required for all transactions

• Slow manual collection and verification process

• Unmanageable situation during peak filing season of Oct-Nov-Dec

• Mostly one office per state

• Ever-increasing stakeholder base

Ever-increasing corporates

Limited Access Points

Physical Presence

Long Queues

• Payments were to be made in person

• Only cash or Demand Draft accepted not even cheque

• Information availability to stakeholders was time consuming and inaccurate

Record Rooms Maintained

Manually

Limited Payment Options

• Paper overload doesn't permit other value added service

• Paper sorting, storage and retrieval was very cumbersome and time consuming

Paper Based Transactions

7

Previous Current

Cont…..

The Transformation

8

1. Business – enabled to register a company

and file statutory documents quickly and

easily

2. Public – to get easy access to records and

get their grievances redressed effectively

3. Professionals - to be able to offer efficient

services to their clients

4. Financial Institutions – to find registration

and verification of charges easy

5. MCA – to ensure proactive & effective

compliance and corporate governance

6. Employees - enabled to deliver best of

services

Nature of Service Prior to MCA21 After MCA21

Name Approval 7 days 1 day

Company incorporations 15 days 1-3 days

BS / AR Filing 60 days Instantaneous

Change in directors 60 days 3 days

Inspection of public

documents

Visit to ROC Online

Facilities for On-line end-end interaction with

MCA services on portal

Provides Any Time, Any Where access to MCA

services on a 24X7 basis

• Revenue Increase from 700 to 1200+ Cr

• ZERO Revenue Leakage

• National Charge Database Established

• Used by all Banks & FIs before loan

disbursal to companies

• Automation of all Internal Functions

• Transaction-wise Payment Reconciliation

Project Objectives and Realization

9

MCA21-Features

• Anytime Anywhere services (24*7*365) enabled

• Automated pre-scrutiny of e-forms

• Verification of credentials of the authorised signatory (DSC and role

check)

• Convenient multiple modes of payment (Credit cards, Internet banking

and physical challans)

• FIFO based, electronic workflow driven, paperless Back office

• Electronic record maintenance preventing quality deterioration

• Institutional arrangement for Project Management and public interface

(PMU)

• Defined performance metrics for Service Level maintenance

• Contractual enforcement of service levels, including a system of

incentives and penalties as part of the commercial terms10

Milestones

Sep, 2002: Project concept initiated

Oct, 2003: Bidding process initiated

Feb, 2004: Formal issue of RFP Document

Feb, 2005: Cabinet Approval

Mar, 2005: TCS Contract Signed

Feb, 2006: Coimbatore pilot launched

Mar, 2006: Delhi pilot launched

Jul, 2006: Completed Nationwide rollout

Sep, 2006: e-Filing mandated

Jan, 2007: Scanning/digitization completed

Jan, 2007: Provisional certification Accorded

11

Visible Achievements

Procedural uniformity across all offices

Speed and certainty of service delivery, with ease of access

Transparency – status of processing of filings and approvals

Problem of malpractices inherent with a paper-based system

addressed (such as ante-date filings, incomplete filings, replacing

documents, etc.)

Establishment of a dependable data for effective compliance

management

Platform for further processes refinement (e.g. central registry)

Empowerment of the citizen/investor with authentic data about

companies through the Internet

Introduced e-stamping from 13th Sept 2009 making incorporation

completely paperless

12

Recent Improvements (2009-10)

E-Stamping:

Introduced E-Stamp from September 2009 as secure, fast and clean

system of stamp duty collection

Joint initiative – MCA, States/ UT and Banks

Dispensed with effort and cost to physically visit the treasury and

saved time

A prominent Green initiative in MCA21 leading to reduction in paper

usage to the extent of 40 lakh pages so far

Emerged as a Model program for replication

New e-Form for rectification of error:Introduced new e-form (Form-68) in Mar’10; enables corporate to rectify mistakes in Incorporation documents through electronic process. 13

Recent Improvements (cont..)

“Company Law Settlement Scheme, 2010” gives

opportunity to the defaulting Companies to enable them to make their

default good by filing belated documents and to become a regular

compliant in future.

“Easy Exit Scheme, 2010” and “Easy Exit

Scheme, 2010” gives opportunity to the defunct companies to

get their names struck off from the register under Section 560 of the

Companies Act, 1956. The EES 2011 was closed on 30.04.2011. Total

36 thousand companies has applied for struck off under section 560 of

the companies Act, 1956 in both the schemes.

14

Recent Improvements (cont..)

Trouble free Peak Filing:

•October and November each year are the peak filing season for

Balance Sheets and Annual Reports

•The Ministry set in motion advance readiness action plan –

• software optimization

• hardware augmentation

• appeal to corporates to stagger filings through media campaigns, portal

message etc.

•More than 12.87 lakh filings were received in the months of Oct & Nov without

any hindrance which is 20% more than last year

•An all time high of 70,000 filings was recorded on 29th Oct 2010 that includes

22,000 balance sheets.

Integration with other regulators:

End-to-end integration with Trademarks Authority through NSDG for informed

regulation is nearing completion. 15

DIN process re-engineering

Application for DIN is being made on eForm and there is no need for submitting documents physically scanned documents along with verification by the applicant will be attached with the eForm and if the eForm is digitally signed by professional or by MD / Director / Secretary of the existing company, DIN shall be granted online. This will reduce the time taken for allotment of DIN from 7-10 days to 1-2 days.

Recent Improvements (cont..)

Challan Payment is not allowed for payment

upto Rs.50000/-

From 2, 3, 18, 32 are made as STP (State

through put process) w.e.f. 01.05.2011 and

eForms are to be added in this category. This

will reduce the ROC workload by around

40%.

Recent Improvements (cont..)

Recent Improvements (cont..)

Introduction of refund Process

There is no refund process in MCA21 for

refund of fee wrongly paid by the user till

recent. Now w.e.f.01.05.2011 the MCA has

allowed refund by way of filing a new refund

eForm for cases of Multiple payments,

incorrect payment or excess payments.

Operational Statistics (as on 31.01.2011)

Average portal hits/ pages viewed per day – 40 lac/ 5 lac

Total filings through the system – 126.76 lac

Peak filing on a single day (on 29.10.2010) – 70,034

Number of companies registered online – 3.42 lac

Company records viewed online – 15.58 lac

Total DIN issued – 20.02 lac

Number of E-stamp transactions – 1.65 lac

Amount of E-Stamp collected – Rs. 25837 lac

E-filing through VFO (Virtual Front Office) – 93%

Online payment transactions (by volume) – 64%

Revenue collection multiplied three fold

19

Impact on Service delivery efficiencies

Nature of Service Prior to MCA21 After MCA21

Name Approval: 7 days 1-2 days

Company Incorporation: 15 days 1-3 days

Change of Name: 15 days 3 days

Charge Regn./ Modification: 10-15 days 2 days

Certified Copy: 10 days 2 days

Registration of Other Documents

Annual Return 60 days Instantaneous

Balance-sheet 60 days -do-

Change in Directors 60 days 1-3 days

Change in Regd. Office Add. 60 days 1-3 days

Increase in Auth. Capital 60 days 1-3 days

Inspection of Public Documents On-line

Focus on delivery of all business critical services in 48 – 72 hours 20

Regulatory efficiency

Easily accessible disclosures of corporate processes and

decisions

Speedy and more effective enforcement action including

scrutiny and inspections without harassment.

Analysis of financial information of companies to detect

accounting and disclosure compliance

Easy to access registry of charges providing critical credit

information about the company.

Analysis of company data to develop risk management

systems to detect abnormalities in financial information filed by companies and assessment of possibility of fraud.

21

MCA21 – Best Practices in e-

Governance

‘Blue print’ Approach – RFP Document

Holistic outsourcing – PPP viability

Digitization of legacy – assembly line approach

RFO – Addressing Digital Divide

DSC – largest usage worldwide

Back office workflow – productivity management

Gateway – simplifying interoperability

Green project – eForm & eStamp (paper elimination)

22

Recognitions

Golden Icon’ in 11th National e-Governance Conference 2008

Dataquest IT Path Breaker Award 2006

“Skoch Challenger Award 2008”

‘Certificate of Excellence’ at Technology Sabha, 2008

Recognized as “a revolutionary step by the Government” in a survey conducted by Ernst & Young

Prime Minister Award for Excellence of Public Administration – 2009

The World Bank in its report has acclaimed E-stamping initiative of the Ministry as one of the significant achievement globally.

23

Current Issues

Finalisation of Exit Management Plan

Changing role of PMU

Formation of SPV

Government Secure Repository (GSR)

24

The Way Ahead

Integration with the other regulators - Income Tax, Trade Mark

Expansion to new services – LLP, OL

Early alerts – aid in prevention of corporate frauds

Data Mining

XBRL for annual statutory filing

25

Thank You

26