Ministry of Corporate Affairs Enhances Statutory Filings with New Web-Based Format

The Ministry of Corporate Affairs (MCA) is set to enhance its technology transformation efforts by migrating more statutory filing forms to a secure web-based format. This shift is part of the ongoing revamp of the MCA21 portal, a mission-mode e-governance project designed to handle the vast data generated by the growing corporate sector. The new system, known as version three, will be implemented on July 15, incorporating additional security features to streamline and safeguard corporate filings.

In the previous year, the ministry successfully transitioned around 50 forms to this new web format. This phased transition ensures minimal disruption, particularly during critical periods like the annual return filing season. The upcoming roll-out will include nine additional forms, including crucial ones for declaring beneficial owners and shareholders not considered beneficial owners. Other forms related to companies’ dues to micro, small, and medium enterprises (MSMEs) and declarations about unclaimed dividends will also adopt the new format next month.

Security on Priority?

A significant enhancement in this update is the introduction of two-factor authentication, which provides an extra layer of security. This ensures that only registered users can file company documents, thereby reducing the risk of fraudulent activities. The new system also enables Registrars of Companies (RoCs) to conduct efficient data analytics and identify compliance issues promptly.

The new web-based forms offer several benefits over the traditional PDF format. They come pre-filled with data from previous filings, presented in a machine-readable format that facilitates real-time verification of submitted information. This seamless integration improves the accuracy and efficiency of the filing process, accommodating the increasing volume of data generated by approximately 150,000 new companies registered each year, each required to file between 80 to 100 statutory documents annually.

Enforcing Legal Provisions?

Experts have highlighted the positive impact of this technology upgrade on all stakeholders. Ved Jain, former president of the Institute of Chartered Accountants of India (ICAI), emphasized that the enhanced system aids in enforcing legal provisions and improves transparency. By encouraging businesses to comply with the updated requirements, the new format also promotes better corporate governance.

The Benefit?

Jain further noted that the improved transparency and efficiency in data capturing and handling will significantly benefit auditors. The ability to verify transactions more effectively will enhance audit and assurance services, ensuring that corporate activities are thoroughly monitored and assessed.

Overall, the MCA’s shift to a web-based statutory filing system marks a significant step forward in leveraging technology to streamline corporate governance and enhance the integrity of corporate filings. This not only simplifies the compliance process for companies but also guards the regulatory framework, developing a more transparent and accountable corporate environment.