April 2006

MCA21

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Keeping in tune with e-Governance initiatives the worldover, the Ministry of Company Affairs (MCA),Government of India, has initiated the MCA21 project, which will enable an easy and secure access to MCA services in a manner that best suits the corporate entities and professionals besides the public. MCA21 is intended to achieve all the objectives of a versatile e-Governance project. The project is named as MCA21 as it aims at repositioning MCA as an organisation capable of fulfilling the aspirations of its stakeholders in the 21st century. Under the project, the business community would now avail MCA services from their respective homes or offices instead of physically travelling to MCA offices, which had so far been an arduous one. The major components involved in this comprehensive e-Governance project are Front Office and Back Office.

The MCA21 project is designed to fully automate all processes related to the proactive enforcement and compliance of the legal requirements under the Companies Act 1956 thus enabling the business community to meet their statutory obligations. From the customer perspective, the Front Office operations assume significance, which would be administered through the Front Office portal. The entire Back Office operations of the MCA would be automated so as to achieve the objective of a user-friendly computerised environment. My MCA portal is the single point of contact for all MCA related services, which can be easily accessed over the Internet by all users.

The project also envisages a cost-effective integrated software solution for computerising various in-house functions like Human Resources Management, Payroll, Accounting and Finance for internal users (employees) of MCA. Permanent documents of existing companies like memorandum of association, articles of association, current charge documents, are presently maintained in paper form across various Registrar of Companies (RoC) offices. These documents are being converted into electronic format and it is being carried out at the respective RoC offices as part of this project.

The scope of MCA21 project covers only the offices of RoCs, Regional Directors and the Headquarters at New Delhi. It excludes other offices like Official Liquidators, Company Law Board/Tribunal and Courts. The success of the service-oriented approach, the important aspect of this project, will depend greatly on analysing and responding to the needs of all stakeholders. To that extent, the project will develop a mechanism to constantly develop and improve the MCA21 system. It will be made possible by analysing usage patterns and error/status messages as well as feedback from the customers comprising the corporates, professionals and the public.

Key Benefits
MCA21 seeks to fulfil the requirements of the various stakeholders including the corporates, professionals, public, financial institutions and banks, Government and the MCA employees. The key benefits of MCA21 project include Online incorporation of companies online; Simplified and easy mode of filing of Forms/Returns; Registration as well as verification of charges anytime and from
anywhere; Inspection of public documents of companies anytime and from anywhere; Corporate-centric approach; Building up a centralised database repository of corporates operating in India; Enhanced service level fulfilment and customer relationship building; Total transparency through e-Governance; Timely redressal of investor grievances; and Availability of more time for MCA employees for qualitative analysis of corporate information.

MCA set up
The MCA mainly administers the Companies Act, 1956 and The Monopolies and Restrictive Trade Practices Act 1969. Besides, it also administers several Acts including The Competition Act, 2002; The Chartered Accountants Act, 1949; The Costs and Works Accounts Act, 1959; The Company Secretaries Act, 1980; The Partnership Act, 1932; The Societies Registration Act, 1860; and The Companies (Donation to National Fund) Act, 1951.

The MCA, which functions under overall direction and supervision of the Minister of Company Affairs, has a three tier organizational set-up for administration of the Act, namely, the Headquarters at New Delhi, the

Regional Directors at Mumbai, Kolkata, Chennai and Noida and the RoCs in States and Union Territories. The Official Liquidators who are attached to various High Courts functioning in the country are also under the overall administrative control of the Ministry.
The Company Law Board, a quasi-judicial body, has its Principal Bench at Delhi, an additional Principal Bench for Southern States at Chennai and four Regional Benches located at Delhi, Mumbai, Kolkata and Chennai. The four Regional Directors are in-charge of the respective regions, each region comprising a number of States and Union Territories.

They supervise the working of the offices of the RoCs and the Official Liquidators working in their regions. They also maintain liaison with the respective State Governments and the Central Government in matters relating to the administration of the Companies Act. Certain powers of the Central Government under the Act have been delegated to the Regional Directors. There is also an inspection unit attached to the office of every Regional Director for carrying out the inspection of the books of accounts of Companies under Section 209A of the Companies Act.

RoCs appointed under Section 609 of the Companies Act and covering the various States and Union Territories are vested with the primary duty of registering companies in the respective States and the Union Territories and ensuring that such companies comply with statutory requirements under the Act. These offices function as registry of records, relating to the companies registered with them, which are available for inspection by members of public on payment of the prescribed fee. The Central Government exercises administrative control over these offices through the respective Regional Directors.

e-Filing
MCA21 project facilitates eFiling of various forms and applications under the Companies Act, 1956, and as per the stipulated Rules and Regulations. As such eFiling is done through an eForm, which is nothing but a reengineered conventional form proposed to be notified, and represents a document in electronic format for filing with MCA authorities through the Internet. This may be either a form filed for compliance or information purpose or an application seeking approval from the MCA. An eForm contains certain standardised features. Each eForm contains the form reference and the description as well as the particular section of the Companies Act or the relevant rules or regulations under which it is required to be submitted. It starts with the Corporate Identity Number (CIN), which works as a unique identifier of a company, in the case of an Indian Company and the Foreign Company Registration Number (FCRN) in the case of a Foreign Company that is required to be filled up. By entering the number, the company details to the extent these are available in static form in the database, are automatically filled in by using the pre-fill functionality.

For the purpose of standardisation and better understanding, the proposed eForms have been grouped under the following broad categories: Company Registration – For the purpose of incorporation in India under the Companies Act, 1956, a company requires name approval from the RoCs by filing Form 1A; Compliance Related Filing – All the statutory filing of eForms, whether annually or event based, is grouped under compliance related filing services; Change Services – It covers matters in respect of Indian companies, especially those pertaining to any change in the capital structure, increase in authorised capital and increase in the number of members;

Charge Management – Companies are required to file particulars for registration of charge created or modified with the concerned RoC. The charge can be created on various types of assets such as immovable properties, plant and machinery, fixed deposits or book debts; and, Investor Services – MCA21 system accepts complaints filed against a company by an investor as part of investor services. There is a specific eForm for this purpose.

The various types of users of My MCA portal includes Authorised Signatory of Business; Professionals; Individual User; External Agency User; PFO/TFO User; and Public User.

The amount of fee depends on many parameters like type of service requested, authorised capital of the company and the stipulated rules for fee calculation. Belated filing entails additional fees as per applicable rules. Services for which fees are chargeable can broadly be categorised under following four categories: Filing of eForms/applications; Inspection of public documents online on portal; Requesting certified copy or extract of a public document; and Transfer deed endorsement. System calculates the fee and it is displayed to the user detailing the services sought. In case user has to make the additional payment as advised by MCA/Company Law Board, the user enters the amount of fee to be paid to MCA.

Payment of fees can be made by user either offline or online depending upon his/her convenience. The payment options available to the user include Credit Card, Internet Banking or Challan.

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