16K companies register during Covid lockdown

Number down by half over last year but experts consider this positive, given the current scenario

The Covid-19 pandemic may have cast a shadow on the overall business activity, but it could not stop a host of new companies from coming into existence. Around 16,000 new companies have been registered since the country went into lockdown, official sources told Business Standard.

“The Central Registration Centre has been working throughout this period, at half the strength, even on weekends and holidays to keep the incorporation of companies going,” a senior government official said.

While the numbers have dropped by over a half compared to last year, experts still consider this a positive development given the global economic climate.

“If so many companies have registered even during Covid-19, it is a good sign. Many of these must be subsidiary companies, or companies formed to meet existing obligations... Demand for PPE kits, sanitizers has also helped in launching many new companies,” said Ankit Singhi, partner, Corporate Professionals.

In April this year, 3,209 companies were registered as against 10,383 last year. Of these, more than 1,000 were listed under the category of business services and over 500 under community and personal services. Close to 700 companies were registered under the manufacturing sector and over 500 were into trading business.

Data for companies incorporated during May and June is yet to be released by the corporate affairs ministry. On an average, approximately 10,000 companies were registered on a monthly basis last year. In May and June last year, 11,281 and 9,619 companies were registered, respectively.

Companies now also receive a bank account number after registration as well as part of the Spice+ form launched in February by the corporate affairs ministry for speedy processing of applications. It enabled online filing and real-time validation.

“We launched this reform when the Covid-19 crisis had already started... We were trying to figure out how we would deploy the form as many countries had started introducing lockdown measures. But we decided to go ahead with 50 per cent strength in our registration centre to help in commencing business in India,” the senior official added.

According to government sources, over 18,000 companies have registered since the launch of the Spice+ form.

Presently, four banks are providing the account numbers to newly registered companies, including Bank of Baroda, HDFC bank, ICICI, Kotak Mahindra and Punjab National Bank.

The corporate affairs ministry is likely to release the data, by September-October, for companies that were struck off according to experts. “During the Covid-19 period, companies would not be struck off as these are hard times,” an industry expert said.