Government Eases Corporate Compliance Burden with Key Reforms in 2024–25

Under the Startup India initiative, the application process for startup recognition is now fully digital through the Startup India portal and the National Single Window System (NSWS).

The Government of India has introduced a comprehensive set of reforms in 2024–25 aimed at simplifying corporate compliance, reducing costs, and promoting ease of doing business for companies of all sizes—including Micro, Small, and Medium Enterprises (MSMEs) and startups. These measures are designed to streamline procedures, embrace digital solutions, and accelerate approvals, thereby enhancing India’s business environment.

Enabling Direct Overseas Listing for Indian Companies

A landmark reform came with the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024, notified on January 24, 2024. This allows Indian public companies to directly list securities in approved foreign jurisdictions. The measure is expected to:

• Strengthen the “Brand India” identity in global markets.

• Boost the technology sector’s attractiveness to international investors.

• Provide an alternative capital-raising channel and diversify the investor base.

• Promote efficiency and growth by enabling greater financial flexibility.

Simplifying Director KYC Updates

On July 16, 2024 (effective from August 1, 2024), the Government amended the Companies (Appointment and Qualification of Directors) Rules, 2014, allowing directors additional opportunities to update personal mobile numbers and email addresses in the KYC database. This addresses long-standing stakeholder feedback on the need for more flexibility in maintaining accurate contact details.

Introducing Faceless Adjudication for Corporate Defaults

A significant digitisation reform came with the Companies (Adjudication of Penalties) Rules, 2014 amendment on August 5, 2024 (effective September 16, 2024), enabling faceless adjudication for corporate default cases. This eliminates physical hearings, allowing directors and key managerial personnel to attend proceedings through virtual conferencing—reducing both logistical burdens and associated costs.

Easing Cross-Border Mergers with Faster Approvals

The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 were amended on September 9, 2024 (effective September 17, 2024) to simplify mergers involving a foreign-incorporated holding company and its wholly owned Indian subsidiary. Approvals for such mergers now come from the Central Government (delegated to Regional Directors) instead of the National Company Law Tribunal (NCLT), significantly speeding up the process and allowing NCLT to focus on more complex matters.

Expanding C-PACE for Company and LLP Closures

The Centre for Processing Accelerated Corporate Exit (C-PACE)—operational since May 1, 2023—was further empowered on August 5, 2024 to process the striking off of Limited Liability Partnerships (LLPs), in addition to companies. This centralised and transparent mechanism ensures faster voluntary closures, reducing compliance burdens for dormant or non-operational entities.

Fast-Tracking Company Registration and Approvals

The Government has implemented multiple measures to speed up incorporation and approvals:

• SPICe+ with AGILE PRO-S: An integrated web form offering 11 services in one application, including name reservation, incorporation, PAN, TAN, DIN, GST registration, EPFO, ESIC, bank account opening, and local registrations.

• Zero incorporation fee: Applies to companies with authorised capital up to ₹15 lakh or up to 20 members with no share capital.

• Central Registration Centre (CRC): Handles company and LLP name reservation and incorporation.

• FiLLiP integration: LLP incorporation now linked with CBDT to issue PAN/TAN at registration.

• Central Processing Centre (CPC): Operational since February 16, 2024, for centralised and faster e-form handling.

Promoting Startup Recognition and Support

Under the Startup India initiative, the application process for startup recognition is now fully digital through the Startup India portal and the National Single Window System (NSWS). Key features include:

• Self-certification to simplify documentation.

• A recognition handbook and tutorials for easy navigation.

• State and regional workshops in partnership with State/UT nodal agencies and incubators to promote awareness and provide on-ground support to entrepreneurs.

Continuous Legal Reforms

Amendments to the Companies Act, 2013, the LLP Act, 2008, and related rules are regularly undertaken based on stakeholder inputs and recommendations from the Company Law Committee. These updates ensure that India’s corporate regulatory framework remains relevant, business-friendly, and aligned with global best practices.

Minister of State in the Ministry of Corporate Affairs and Ministry of Road, Transport and Highways, Shri Harsh Malhotra, shared these developments in a written reply to the Rajya Sabha, reaffirming the government’s commitment to creating a simpler, faster, and more transparent corporate compliance environment.