India 2018

268 India 2018
Companies in the Registry
Total number of companies registered in the country by March, 2017, under the
Companies Act, 2013, the Companies Act, 1956 and the previous company Laws,
stood at 16,41,333. Of these, 3,01,778 companies were closed; 802 were lying
dormant as per Section 455 of Companies Act, 2013; 1,38,206 companies have
not filed statutory annual filings consecutively for two years; 5,698 companies
are under liquidation; names of 25,264 companies are in the process of being
removed under Section 248 of the Companies Act, 2013; and 282 companies
were in the process of being re-activated. Taking all these factors into account,
there were 11,69,303 active companies in March, 2017.
Corporate Social Responsibility
In India Corporate Social Responsibility (CSR) for companies has been mandated
through legislation through Section 135 of the Companies Act, 2013. Section
135, Schedule VII of the Companies Act, 2013, and the Companies (Corporate
Social Responsibility Policy) Rules, 2014 came into force from April, 2014. From
time to time the Ministry has made amendments to Companies (CSR Policy)
Rules, 2014 and issued clarifications and FAQs by way of circulars, so as to
facilitate effective implementation of CSR and ensure its compliance.
Sensitisation workshops have been organized by the office of Regional Directors
in collaboration with the regional chapter of Professional Institutes and Industry
Chamber to ensure effective compliance of CSR provisions by companies.
Further, on recommendation of the High Level Committee on CSR, Ministry of
Corporate Affairs has instituted Annual CSR Awards.
Limited Liability Partnerships
In India, about 95 per cent of industrial units are Micro, Small and Medium
Enterprises (MSMEs). As per the survey conducted by MSME, over 90 per
cent of these are registered as proprietorships, about 2 per cent to 3 per cent
as partnerships and less than 2 per cent as companies. The corporate form
does not appear to be widely prevalent amongst MSMEs. Analysis of the
data collected by the Ministry of MSME suggests that high compliance cost
under the Companies Act, 1956 deterred the MSMEs from adopting the
corporate form.
The functioning of a proprietorship or a partnership firm is too opaque,
making assessment of credit-worthiness by bankers difficult, and therefore,
the MSME sector is at a comparative disadvantage vis-à-vis corporate bodies
in accessing loan/credit facilities from banks and other financial institutions.
A need was felt for a new corporate form that would provide an alternative
to the traditional partnership with unlimited personal liability on the one
hand, and the statute-based governance structure of the limited liability
company on the other. In this context, the Limited Liability Partnership
(LLP) Act was enacted in 2008 and came into force from 2009.
LLP is a form of business entity, which allows individual partners to be
protected from the joint and several liabilities of partners in a partnership