Presenting the Union Budget for 2016-2017 this week, Indian Finance Minister Arun Jaitley announced that a bill recommending amendments to the Companies Act 2013 will be introduced during the current session of Parliament. The proposed amendments will aim to improve the ease of doing business in India and create an 'enabling environment' for startup companies through specific reforms, including reducing the time it takes to register a new business in India to just one day. Currently, it takes 3-4 days to register a private company in India.

Simpler laws, startup friendly

A panel convened by the Ministry of Corporate Affairs last year to examine issues arising from implementation of the Companies Act submitted its report to the Indian government on 1 February. The specifics of the amendment bill will draw from the nearly 100 recommendations put forward by the panel, which include simplifying the legal frameworks around incorporating a company and raising funds, as well as laws regarding insider trading and corporate misconduct. It is expected that the new bill will help create a much friendlier business environment for startup ventures in India, bolstering the government's own Startup India campaign. Significant tax exemptions will be offered to startup companies, as well as a reduction of up to 80 per cent on the costs associated with patent applications.

Stakeholder approval

One stakeholder, the Internet & Mobile Association of India, has praised the forthcoming amendments to the Companies Act 2013 as a win for startup businesses and Indian innovation. 'The focus on leveraging technology to streamline distribution and the proposed steps for ease of doing business in India are indicative of the government's resolve towards Digital India supporting entrepreneurship,' said IAMAI president Subho Ray. The government's plan to introduce a 100 per cent tax reduction program for three years over a five-year period for all startups registered under the Startup India scheme before FY2019 was also welcomed by Mr Ray. 'This move is a step towards providing incentives to startups in the form of better incubation, talent and capital,' he said. Sources: Indian Express; India Today; Times of India