Parliament Question: Ease of Doing Business in the country

GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS RAJYA SABHA UNSTARRED QUESTION NO. 381 ANSWERED ON TUESDAY, FEBURARY 03, 2026 EASE OF DOING BUSINESS IN THE COUNTRY QUESTION 381. SHRI SATNAM SINGH SANDHU: Will the Minister of CORPORATE AFFAIRS be pleased to state: (a) the steps taken by Government to improve the Ease of Doing Business in India, particularly for startups and small businesses; (b) the status of implementation of decriminalization of minor corporate offenses under the Companies Act, 2013 and its impact on business compliance; (c) the number of companies registered in India in the last five years, the details thereof, year- wise and sector-wise; (d) the measures taken to strengthen corporate governance and transparency, including actions against companies involved in financial fraud or non-compliance; and (e) whether Government has plans to further simplify regulatory compliance for businesses and enhance digital platforms for corporate filings and if so, the details thereof? ANSWER THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD, TRANSPORT AND HIGHWAYS [SHRI HARSH MALHOTRA] (a): The Ministry of Corporate Affairs has been taking steps to improve Ease of Doing Business for companies and LLPs including startups and small businesses. The important steps taken in this regard are at Annexure-1. (b): Amendments were made in CA-13 in 2019 and 2020 and in the LLP Act, 2008 in 2021 to de- criminalize 63 offences. While providing relief to corporates, one of the objectives ofdecriminalization has also been reduction of litigation burden in judicial courts and shifting the prosecution cases towards adjudication. (c): The details are at Annexure-2. (d): The provisions of the Companies Act, 2013 and the rules made thereunder contain adequate provisions to ensure financial accountability and transparency in the management of companies. These provisions inter alia require maintenance of books of accounts and statutory registers at the registered offices, preparation of financial statements in accordance with applicable financial reporting/accounting standards and filing them with the Registrar after due approvals. Non- compliance of relevant provisions attracts penal action. Further, whenever any complaints relating to financial fraud or non-compliance are received, inquiry, inspection, or investigation is ordered under sections 206(4), 206(5), and 210 of the Companies Act, 2013. Moreover, under Section 212 of the Companies Act, 2013, when the Central Government is of the opinion that it is necessary to investigate into the affairs of the company by Serious Fraud Investigation Office (SFIO), then investigation is assigned to SFIO. (e): Version-3 of MCA21 (MCA21 V3) has been launched to promote Ease of Doing Business, strengthen compliance and enhance transparency. Through MCA21 V3, functionalities like Web filings, LLP Module, Company module, have already been implemented. All filings are now being made through V3 portal, which provides for real time validation with pre-filled master data reducing manual errors, re-submissions and compliance timelines. *******Annexure-1 Annexure-1 to the Rajya Sabha Unstarred Q. No. 381 part (a) to be answered on 3rd February, 2026 Important steps taken to improve Ease of Doing Business for companies and LLPs, including startups and small businesses I. Amendments have been made in the Companies Act, 2013 (CA-13) in 2015 & 2017 to facilitate ease of doing business and address concerns expressed by industry chambers & other stakeholders. II. Amendments have been made in CA-13 in 2019 and 2020 to de-criminalize technical & procedural violations and thus reduce the burden on criminal courts & National Company Law Tribunal (NCLT). They were also aimed at streamlining compliance requirements for Small Companies, One Person Companies, Start-ups and Producer companies. III. Amendments have been made in the Limited Liability Partnership (Amendment) Act, 2021 to decriminalise technical & procedural violations. A new category of "Small LLP" was introduced for providing reduced compliance burden and lower fees to encourage formalization of small businesses. IV. Exemptions from various provisions of Companies Act to Private companies, Government Companies, Charitable companies, Nidhis and IFSC (GIFT city) companies have been provided through issuance of notifications under section 462 of the CA-13 during 2015, 2017 and 2020. V. There is no fee for incorporation of company with authorized capital up to Rs.15.00 Lakh. VI. Direct listing of securities by Indian public companies in permissible foreign jurisdictions has been allowed. This is a boost for “Brand India” and increases attractiveness to growing technology sector, stimulates efficiency & growth, provides alternative source of capital and broadens investor base. VII. The scope of fast-track merger was expanded in February 2021 to allow mergers of Start-ups with other Start-ups and with Small companies. The ambit has been further broadened in September 2025 to allow more classes of companies to choose this route. The rules have also been amended so that the “deemed approval” requirement is implemented more effectively for fast- track mergers. VIII. The Central Registration Centre (CRC) was operationalized in 2016 to provide speedy incorporation related services. An e-Form SPICe+ along with a linked form called AGILE PRO-S was introduced for providing different services at one place such as Name Reservation, Incorporation, Allotment of PAN, TAN, DIN, EPFO Registration, ESIC Registration, GST number, opening of Bank Account etc. at the time of incorporation of company to start the business immediately. Similarly, new e-Form FiLLiP (Form for incorporation of Limited Liability Partnership) was introduced for LLPs.IX. The Centre for Processing Accelerated Corporate Exit (C-PACE) was established in May 2023 enabling the stakeholders by providing a hassle-free filing, timely and process-bound striking off their companies’ and LLPs’ names from the Register. X. The Central Processing Centre (CPC) was established in February 2024 for centralized processing of 12 non-STP forms. XI. The Companies (Adjudication of Penalties) Rules, 2014 have been amended in August 2024 pursuant to which it has been provided that the adjudication proceedings under section 454 of the Companies Act, 2013 shall take place in electronic mode only through the e-adjudication platform developed by the Ministry for this purpose. The platform provides for end-to-end digital process including online generation of notices, hearings, generation of adjudication orders and payments. This enhances transparency and enables speeder adjudication. XII. With effect from 1st December 2025, the thresholds for small company have been enhanced. The paid-capital criteria has been increased from upto Rs. 4 crores to upto Rs. 10 crore and turnover criteria has been increased from up to Rs. 40 crores to upto Rs. 100 crores. This brings more number of companies under the definition of small company, which are subject to lesser compliance requirements in comparison to larger companies. XIII. Pursuant to the amendment in the Rules notified on 31st December, 2025 (to be effective from 31st March, 2026), annual KYC filing requirement has been replaced with a simpler KYC intimation once in every three years. XIV. Further, small companies and start-ups are provided with certain common compliance relaxations under the Companies Act, 2013 with the objective of reducing regulatory burden and facilitating ease of doing business. For both categories, the requirement of including a cash flow statement as part of the financial statements has been made optional. Further, in cases where a company does not have a company secretary, the annual return may be signed by a director of the company. In addition, flexibility has been granted with respect to meetings of the Board of Directors, whereby both small companies and start-ups are permitted to hold two board meetings in a calendar year, i.e., one meeting in each half of the year, instead of the general requirement of holding four board meetings annually, subject to the prescribed minimum gap between such meetings.Annexure-2 Annexure-2 to the Rajya Sabha Unstarred Q. No. 381 part (c) to be answered on 3rd February, 2026 The number of companies registered in India in the last five years 2020-2021 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026* Grand Total 155379 167087 159307 185320 181138 198249 1046480 * Data as on date Sector-wise distribution of companies Sector-wise Activities Registered 2020- 2021- 2022- 2023- 2024- 2025- Grand Companies 2021 2022 2023 2024 2025 2026* Total Agriculture and Allied Activities 11062 13340 11400 10745 6092 5328 57967 Business Services 44150 43828 39302 27874 27643 30718 213515 Community, personal & Social Services 19533 23667 23807 49162 48325 52232 216726 Construction 9609 10548 10386 11583 12242 13470 67838 Electricity, Gas & Water companies 1649 1756 1911 3277 5574 7539 21706 Finance 5104 6287 6026 6392 5103 5173 34085 Insurance 167 191 82 39 50 45 574 Manufacturing (Food stuffs) 8368 6899 5864 4519 4488 5763 35901 Manufacturing (Leather & products thereof) 290 293 323 348 249 322 1825 Manufacturing (Machinery & Equipments) 6869 7670 7325 7079 6897 7825 43665 Manufacturing (Metals & Chemicals, and products thereof) 10322 11600 10285 8700 8226 8826 57959 Manufacturing (Others) 2202 2596 2667 2848 2768 3015 16096 Manufacturing (Paper & Paper products, Publishing, printing and reproduction of recorded media) 1916 1818 1579 884 790 839 7826 Manufacturing (Textiles) 3121 3274 3178 2542 2148 2454 16717 Manufacturing (Wood Products) 261 248 274 313 320 373 1789 Mining & Quarrying 1134 998 964 834 921 896 5747 Others 21 35 24 7 1 88 Real Estate and Renting 4727 6025 6270 8349 8394 8701 42466 Trading 19864 20153 20820 29010 29908 33413 153168 Transport, storage and Communications 5010 5861 6820 10815 11000 11316 50822 Grand Total 155379 167087 159307 185320 181138 198249 1046480 * Data as on date