New data processing unit to streamline corp filings
New Delhi, April 16, 2023
India’s upcoming central data processing center will ensure speedy and objective approval of corporate filings by taking work from scattered regional offices, a person aware of the development said, freeing the latter for more scrutiny and enforcement work. .
The person said on the condition of anonymity that the centralized data processing unit will be set up at the campus of the Indian Institute of Corporate Affairs (IICA) in Manesar, Haryana. IICA is an organization affiliated with the Ministry of Corporate Affairs that trains personnel, conducts research and maintains records of persons who are eligible to be directors on company boards.
The data processing center was announced by the Union Minister for Finance and Corporate Affairs in the Union Budget 2023-24, but the details of its implementation have not been made public so far.
“This changes the process flow of the existing approval system where files go to ROCs across the country. Under a separate practice, many corporate disclosures have been exempted from the requirement of ROC approval in favor of an online acknowledgement, which is referred to as straight-through processing. All other forms will go to the centralized facility for approval,” said the person cited above.
Currently companies do such filing at the local Registrar of Companies (ROC) office. There are 25 ROCs across the country looking after the registration of companies and Limited Liability Partnerships (LLPs) in India and their compliance. Once the Faceless Processing Center is set up, all information disclosures and statutory forms that require approval will go to this facility instead. With this, most of the functions of the RoCs will be automated, freeing up their time and resources to focus on investigation and enforcement. The centralization of the approval process is also expected to bring greater objectivity in regulatory decisions.
An email sent to the Ministry of Corporate Affairs on Friday seeking comment for the story remained unanswered till press time.
Experts said it is a welcome move, but there are safeguards needed for a smooth rollout.
“The thought process of having a centralized processing center for filings related to company law is excellent. To be able to achieve the objectives of this measure, it is important to implement guidelines, train officials and also have regional help desks So that professionals can understand the reasons behind the decisions of the Centralized Processing Center and also clarify their position,” said D Nagendra Rao, former president of the Institute of Company Secretaries of India (ICSI).
Rao also said that the government’s intention to channelize RoC’s time and resources through automation of form processing is a good idea, as it will also raise the bar for professionals and help improve governance in companies.
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