Revision in ‘Small Companies’ definition

Proposed Easing of Rules in ‘One Person Companies’ for Startups, Innovators

Strengthening of NCLT Framework for Faster Debt Resolution

Proposed Launch of New MCA21 Version 3.0

Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman proposed reforms for small companies and MSMEs to strengthen the Startup ecosystem while presenting the Union Budget 2021-22 in Parliament today.

Decriminalization of the Limited Liability Partnership (LLP) Act, 2008

The Finance Minister proposed decriminalizing the Limited Liability Partnership (LLP) Act, 2008, on similar lines to decriminalizing the procedural and technical compoundable offences under the Companies Act, 2013, which is complete.

Revision in ‘Small Companies’ definition

Smt. Sitharaman proposed to revise the definition under the Companies Act 2013 for Small Companies by increasing their thresholds for Paid-up capital from “not exceeding Rs 50 lakh” to “not exceeding Rs 2 crore” and turnover from “not exceeding Rs 2 crore” to “not exceeding Rs 20 crore”. This will benefit more than two lakh companies by easing their compliance requirements.

Proposed easing of rules in ‘One Person Companies’ for Startups, Innovators

As a further measure that directly benefits Startups and Innovators, the Finance Minister proposed to incentivize the incorporation of One-Person Companies (OPCs) by allowing OPCs to grow without any restrictions on paid-up capital and turnover, allowing their conversion into any other type of company at any time, reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days and also allow Non-Resident Indians (NRIs) to incorporate OPCs in India.

Strengthening of NCLT framework for faster debt resolution

To ensure more rapid resolution of cases, the Finance Minister stated that the NCLT framework will be strengthened, the e-Courts system shall be implemented, and alternate debt resolution methods and a unique framework for MSMEs will be introduced.

Launch of new MCA21 Version 3.0

During the coming fiscal year 2021-22, the finance minister said the government will launch data analytics, artificial intelligence, and machine learning-driven MCA21 Version 3.0. This Version of MCA 3.0 will have additional modules for e-scrutiny, e-adjudication, e-consultation, and Compliance Management.

Source: Press Release
Release ID: 1693883
PIB
Ministry of Finance
Date: February 01, 2021