New Delhi: The Ministry of Corporate Affairs is gearing up for a technology transformation in corporate filings by shifting more statutory filing forms to a web-based format with enhanced security features. An update from the ministry revealed that around 50 forms were migrated to the new format last year.
On 15 July, nine additional forms will be introduced in the new format, known as version three. Two crucial forms for companies to disclose their beneficial owners and shareholders who are not beneficial owners will be included in this update, the ministry announced.
Forms related to reporting companies’ dues to micro, small, and medium enterprises (MSMEs) and various declarations on unclaimed dividends will also transition to the new format starting next month.
A source familiar with the upgrade mentioned that the new forms will require two-factor authentication, enhancing security measures to prevent fraud in company filings.
The upgraded system will enable Registrars of Companies (RoCs) to perform data analytics efficiently and identify compliance issues effectively, the source added.
What’s the New Format?
The Ministry is gradually transitioning from PDF format to a web-based format to revamp the IT infrastructure of the statutory reporting portal MCA21. This initiative aims to manage the burgeoning data generated by the expanding corporate sector efficiently.
The new format includes pre-filled data from previous filings in a machine-readable format, coupled with additional authentication for real-time verification of submitted information.
Last year, nearly 50 forms were migrated to the new format. The ministry halted the introduction of new forms during the annual return filing season to prevent disruptions.
With a significant number of new companies registering each year, each required to file numerous statutory documents, the technological advancement in statutory filings is pivotal for overseeing corporate governance closely.
What’s the Impact?
Experts believe that the technology upgrade in the statutory filing system benefits all stakeholders.
Former president of the Institute of Chartered Accountants of India (ICAI), Ved Jain, stated, “It certainly aids in enforcing legal provisions, enhances transparency, and elevates corporate governance by prompting businesses to meet the required standards.”
Jain highlighted that improved transparency and efficiency in data handling enables auditors to verify transactions, a crucial aspect of audit and assurance services.
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Challenges Remain
Experts pointed out that certain functions of the new portal, constructed from scratch, need fine-tuning. Technical glitches encountered during the tech upgrade last year prompted the ministry to proactively engage with users through various channels to address grievances.
Subodh Dandawate, associate director at Nexdigm, mentioned, “Despite the migration of more forms, unresolved technical glitches continue to pose challenges. Addressing these issues is vital to facilitate ease of doing business.”
Dandawate emphasized the importance of engaging meaningfully with stakeholders to understand and resolve concerns, ensuring a smoother transition to the updated system.
