Private companies will no longer have to wait for a certificate of commencement to start business operations. The government has done away with this requirement, taking another step to ease doing business in India. Promoters will only have to inform the Registrar of Companies online, a measure to ensure that starting a business in India is less cumbersome as PM Narendra Modi pushes to improve India’s image as an investment destination.

India is ranked 142 out of 189 nations in the ease of doing business rankings, according to the World Bank. Singapore tops the global ranking. “The procedural requirement to commence business operations was seen as cumbersome. We have changed the provisions to intimation and not obtaining the COB,” said a senior official of the Ministry of Corporate Affairs.

According to the Companies Act 2013, after completion of incorporation, companies had to obtain a certificate of commencement of business operations within 180 days and no activity could start before that.

Under the Companies Act 1956, only public companies had to obtain the certificate before starting operations. But under the Companies Act 2013, the government made the requirement mandatory for both private & public companies. The corporate affairs ministry is also working on integrating applications for director identification number, name availability and intimation of registered office into a single form. The move would cut the time.

(economic times)