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Registration of new companies sees surge during the pandemic

Source | www-thehindubusinessline-com.cdn.ampproject.org | NARAYANAN V

Services, tech sectors see highest registrations

The two waves of Covid-19 pandemic and the consequent business and economic uncertainty did little to dent the entrepreneurial spirit of Indian businessmen.This is evident in the month-on-month new company registrations consistently going up after hitting a nadir in April 2020.

According to the MCA database, the number of new company registrations hit a low of 3,209 in April 2020. It then picked up pace with various phases of unlocking to cross 16,000 registrations in July 2020, possibly due to backlogs and remained above the level till October 2020. The monthly registrations hit a fresh high of 17,324 companies in March 2021 and stood at 10,915 companies in May 2021.

Impact of digitisation

Industrial law and compliance experts attribute the increase in new company registrations to the introduction of GST, e-Way billing system and overall digitisation of the economy which has put undue pressure on informal businesses to come into the formal system to stay afloat.

“The government has digitised the entire GST process and introduced e-Way billing. When everything is digitised, the ability to survey non-compliance improves and the room to play around gets limited. This is putting pressure on the second economy to get into the formal economy,” said Nagaraj Krishnan, MD, Aparajitha Corporate Service Private Limited.

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www-thehindubusinessline-com.cdn.ampproject.org
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