The Ministry of Corporate Affairs (MCA) is designed to present an artificial AI-based model later this month, aimed at automating and expediting the process of company name approvals, says a senior official from the government.
The system will assign a confidence rating ranging from one to five to each proposed company name. This rating reflects the possibility of the name being approved without issues. Names that are similar to existing ones will receive a lower score, encouraging users to consider alternative options.
1.3 days was the last month’s average time taken for the approval or rejection of a company incorporation application, as per the MCA portal. The motive of the government is to reduce it to less than a day with the use of enhanced technology.
By the end of the month, the AI-enabled system is anticipated to be launched. Initially, low-risk cases such as those with no apparent rule breaches will be approved without human intervention.
“This green channel process will bring greater transparency to the system. Ultimately, our goal is to eliminate human intervention where possible and deploy resources where they are most needed,” the official cited.
According to the experts, despite the digitisation of procedures, the company incorporation in India is still not easy, marked by rigorous regulatory scrutiny and demanding procedural requirements. As per a tax expert, the company incorporation in India encounters issues with name approval being the most critical. The main issue is to include documentation gaps, name approval hurdles, and interpretational ambiguities under the MCA framework.
MCA is creating the AI model in collaboration with its pertinent service provider. LTM (formerly LTIMindtree) is using a graphics processing unit from the India AI Stack, the official expressed.
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The issue with the company incorporation in India is the opacity and subjectivity of the system, and not the law. The name approval has become opaque. As per ‘similarity’ or ‘generic usage’, the Central Registration Centre routinely rejects names even when applicants have conducted proper Rule 8 analysis, trademark checks, and filed no-objection certificates.
Foreign subsidiaries encounter issues because of strict know-your-customer requirements for overseas directors, with minor mismatches frequently pushing timelines from days to weeks. A little accountability or consistency in the method of framing or resolving the objections is lacking.
As per the MCA portal, in March 2026, the number of companies incorporated has surged to 22,320 compared to 21,157 a year earlier.
According to the January 2026 monthly information bulletin, the registration of the new company has surged 39% in January 2026 to 23,280 compared with the same month last year. During the November-January 2026 quarter, the Limited liability partnership registrations rose 54.5 per cent to 25, 217.
Source: Business-standard.com
