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Ease of Doing Business in India and the Role of Legal Firms

Hrishikesh Datar, Founder & CEO, Vakilsearch
Tuesday, December 8, 2015
Hrishikesh Datar, Founder & CEO, Vakilsearch
Vakilsearch is a completely automated technology driven online platform that offers a wide range of legal services such as company incorporation, trademark & patent registrations and many others through in-house and marketplace experts.

World Bank's recent report on 'Ease of Doing Business' ranks India at a meagre 130th position amongst 189 countries. While this is 12 places higher than last year, India is still ranked behind parallel economies like Brazil (116), China (84), South Africa (73) and Russia (51). Prime Minister Modi's push for getting investments into India with on-ground policy changes has made India more business friendly than before. The same report also encouragingly mentions that the average number of days to start a business in India has come down to 29 from 127 last year. Nonetheless, policy changes in the past year suggest that India is going in the right path.

Policy Changes

The Government has made a number of policy changes so that it becomes easier for entrepreneurs to start and operate their businesses in India. The introduction of Form INC 42 in May 2015 merged the process of getting Director Identification Number (DIN), Name Approval and Incorporation application into one single process. This simplifies and fast tracks the company registration process in India. The Companies (Amendment) Bill, 2015 has boldly decided to remove the minimum paid-up capital requirement that was previously Rs.1 lakh for private limited companies and OPCs (One Person Company) and Rs.5 lakh for public limited companies. So, a young entrepreneur who had to issue share capital worth Rs.1 lakh previously can now issue even Rs.5000, which majorly reduces the cost of starting-up.
If media reports are to be believed, the central government is busy putting together a policy framework aimed at regulating the startup industry in India. It is being speculated that the framework will help startups bypass existing, complex procedures for matters such as company registration; labour registration and income tax for a certain number of years or till such companies achieve a predetermined revenue threshold. The central government has also proposed a set of modifications in the existing patent rules which will speed up the process of patent registration in India.

Role of Legal Firms

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