In an attempt to bring down the compliance burden on companies,
especially the small and medium enterprises (SMEs), the commerce
ministry has urged the ministry of corporate affairs (MCA) to explore
avenues where firms can opt for self-certifying their returns as well as
clubbing all the returns
to be filed in a year into a single annual
return.
Besides, it also wants that forms such as those related to
certifying a company’s registered office and for becoming director in a
company too should be clubbed with the annual return.
Sources
said that commerce ministry earlier this week approached the MCA
requesting it to explore options regarding bringing down the number of
compliances companies have to follow to reduce their regulatory burden.
“They
urged MCA to do away with the requirement of verification by a
chartered accountant or a company secretary in filing returns under
Companies Act, 2013 and introducing the practice of self-certification
or self-verification,” a senior official said.
Another issue
flagged by the commerce ministry was over the number of returns filed by
companies, sources said, adding that “ministry is in favour of
exploring whether there can be scope for merging all the returns into a
single annual return to reduce compliance burden”.
Confirming the
development, a commerce ministry official said that the government is
committed towards creating a conducive business environment by
streamlining such regulatory structures.
“We have also requested
MCA to look into filing for forms for validating a company’s address
(Form INC-22A) and for applications regarding becoming director in a
company (Form DIR-3). We have inquired whether the late date of filing
form INC-22A and DIR-3 can be deferred and the same can be merged with
the annual return, which is filed by November 30 every year”.
The
industry largely had a mixed response to the development with AMRG &
Associates, a chartered accounting firm saying that merging numerous
forms in a single annual return is a good move towards ease of doing
business and would help reduce the burden of compliances on corporate
sector.
Gaurav Mohan, the CEO of AMRG & Associates, however,
had a word of caution. “Moving away from profession certifications to
self-certification would greatly increase the risk of fraud, wilful
misstatement, and suppression of facts leading to corporate
mismanagement,” he said. “Moving away from professional responsibility
and accountability may initiate an era of non-governance burning
investor confidence in Indian markets.”