Executive Summary:
In response to Lok Sabha Unstarred Question No. 3532, the Ministry of Corporate Affairs (MCA) outlines steps taken to reduce pending prosecutions under the Companies Act, improve ease of doing business, and strengthen corporate governance. This includes withdrawing procedural and technical cases from courts, decriminalizing offences, and streamlining company processes. As of June 30, 2025, 6267 cases have been withdrawn following initiatives started in 2017.
Key Points / Main Content:
Reduction of Pending Prosecutions:
* MCA established committees in 2017 and 2022 to recommend the withdrawal of prosecutions related to procedural and technical offenses.
* 14,247 prosecutions were withdrawn in a Special Drive in 2017.
* A decision was made to withdraw 7,338 compoundable cases in Special Drive II in 2023; 6,267 cases had been withdrawn as of June 30, 2025.
Improvement of Ease of Doing Business and Corporate Governance:
* Decriminalized 63 offenses under the Companies and LLP Acts.
* Established a Centralized Registrar of Companies (CRC) for incorporation.
* Set up a Centre for Processing Accelerated Corporate Exit (C-PACE) for voluntary company exits.
* Created a Central Scrutiny Centre (CSC) for centralized scrutiny of eForms filed under Straight Through Process (STP).
* Converted over 50 forms to STP, eliminating the need for field office approval.
* Established a Central Processing Centre (CPC) for centralized processing of specified non-STP eforms.
* Introduced eForm SPICe with AGILE PROS and FiLLiP for integrated services like name reservation, incorporation, PAN, TAN, DIN, EPFO/ESIC registration, GST number, and bank account opening.
* Amended the definition of small companies by increasing the threshold to a paid-up capital not exceeding Rs. 4.00 Crore and turnover not exceeding Rs 40.00 Crore; introduced the concept of small LLP with lesser compliances and fees.
* Zero fee for company incorporation with authorized capital up to Rs. 15.00 Lakh.
* Extended the fast track merger process to include mergers of Startups with other Startups and small companies.
* Allowed Annual General Meetings (AGM) and Extraordinary General Meetings (EGM) through Video Conference (VC).
* Zero cost for shifting the registered office of a company.
* Issued Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024, allowing Indian public companies to list on international stock exchanges at GIFT IFSC.
Impact Analysis:
Judicial Courts:
* Impact: Reduced burden of procedural and technical cases, allowing focus on more serious offenses.
* Action Required: Process withdrawal of identified cases.
Companies and LLPs:
* Impact: Reduced compliance burden through decriminalization, streamlined processes, and updated definitions of small companies/LLPs.
* Action Required: Utilize simplified procedures for incorporation, mergers, and exits; comply with updated regulations.
Startups:
* Impact: Expedited merger processes and easier access to capital.
* Action Required: Utilize fast-track merger processes and explore international listing options.
Ministry of Corporate Affairs:
* Impact: Enhanced efficiency and oversight through centralized systems and streamlined processes.
* Action Required: Maintain and improve the new centralized systems (CRC, C-PACE, CSC, CPC) and STP processes.
Key Entities Referenced
Ministry of Corporate Affairs: The Indian government ministry responsible for regulating corporate affairs in India.
Companies Act: Refers to company law. It is an Act of the Parliament of India that regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company.
Companies Act, 2013: An Indian law that regulates companies in India, including mergers.
Special DriveI: A specific initiative undertaken in 2017 by the Ministry of Corporate Affairs to withdraw prosecutions.
Special DriveII: A specific initiative undertaken in 2023 by the Ministry of Corporate Affairs to withdraw compoundable cases.
Limited Liability Partnership: A partnership in which some or all partners have limited liabilities. It exhibits elements of partnerships and corporations.
GIFT IFSC: Gujarat International Finance Tec-City International Financial Services Centre. A financial services hub in Gujarat, India.
Companies Listing of Equity Shares in Permissible Jurisdictions Rules, 2024: Rules issued by the Ministry of Corporate Affairs allowing Indian public companies to list their equity shares on international stock exchanges at GIFT IFSC.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 3532
ANSWERED ON MONDAY, 11th, August, 2025
Sravana 20, 1947 (Saka)
Reduction in Pending Prosecutions.
QUESTION
3532 Shri Anup Sanjay Dhotre:
Will the Minister of CORPORATE AFFAIRS be pleased to state:
(a) Whether the Government has taken any steps to reduce the burden of
pending prosecutions under the Companies Act;
(b) if so, the details thereof including the number of cases withdrawn so far;
and
(c) the steps taken by the Government to improve ease of doing business and
strengthen corporate governance in the country?
ANSWER
THE MINISTER OF STATE OF THE MINISTRY OF CORPORATE AFFAIRS AND
MINISTRY OF ROAD TRANSPORT AND HIGHWAYS.
(SHRI. HARSH MALHOTRA)
a) & (b) : The Ministry of Corporate Affairs (MCA) has taken several steps to
review pending prosecutions in various courts. In 2017 and later in 2022, a
committee of senior officers of MCA was set up to give recommendations
regarding withdrawal of prosecutions. The objective was to free Judicial
Courts from dealing with offences that are procedural and technical in nature
to ensure that courts are able to focus on serious offences. It was envisaged
that cases of procedural and technical nature may be handled through an
adjudication process.
(contd.2..)
1Accordingly, 14,247 prosecutions were withdrawn in Special Drive-I
conducted in 2017. Further, a decision has been taken for withdrawal of 7,338
compoundable cases identified in Special Drive-II in 2023. Till 30.6.2025, 6267
cases have been withdrawn from various courts.
(c): To improve ease of doing business and enhance corporate governance,
Ministry has taken several steps in the recent past including some major steps
as under:-
(i) Decriminalization of 63 offences under the Companies and LLP Acts. One
of the objectives of decriminalization has also been reduction of litigation
burden in judicial courts and shifting the prosecution cases towards
adjudication;
(ii) Setting up of a Centralized Registrar of Companies (CRC) for
incorporation;
(iii) Setting up of a Centre for Processing Accelerated Corporate Exit (C-
PACE) for voluntary exit of companies;
(iv) Setting up of a Central Scrutiny Centre (CSC) for centralised scrutiny
of e-Forms filed under Straight Through Process (STP);
(v) Conversion of more than 50 forms to STP which earlier required
approval of field offices;
(vi) Setting up of a Central Processing Centre (CPC) for centralised
processing of specified non-STP e-forms;
(vii) Introducing a new e-Form SPICe+ along with a linked form called AGILE
PRO-S 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 providing the same services for Limited Liability
Partnerships in a single application;
(viii) Definition of small companies has been amended by increasing the
threshold limit of a small company, having a paid-up capital not exceeding
(contd.3..)
2Rs. 4.00 Crore and turnover not exceeding Rs 40.00 Crore. Similarly,
concept of small LLP has been introduced which is subject to lesser
compliances, lesser fee to reduce the cost of compliances;
(ix) Zero fee for incorporation of company with authorized capital up to
Rs.15.00 Lakh;
(x) Extended fast track process for mergers under the Companies Act,
2013 to include mergers of Startups with other Startups and with small
companies, so that the process of mergers & amalgamations is expedited;
(xi) Convening Annual General Meeting (AGM) and Extra-ordinary General
Meeting (EGM) of a company through Video Conference (VC);
(xii) Zero cost for shifting of the registered office of a company;
(xiii) The Ministry has issued Companies (Listing of Equity Shares in
Permissible Jurisdictions) Rules, 2024 allowing Indian public companies to
list their equity shares on international stock exchange(s) at GIFT IFSC.
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