The two corona waves have ruined the entire planet and have choked production, shut down the industries, led to cash crunch but increased the registration of companies. Similar to the notion that “Action speaks louder than words” there is a saying that “facts speak better than words”. This is proved when we open the statistics related to the registration of companies.
If we douche the facts and figures of the Ministry of Corporate Affairs (MCA), then we would find during April 2020 when Corona did not take the form of monster, registrations hit a low figure of 3,209 cases. It got momentum in July 2020 when the number of figures touched 16,000 registrations. The reason can be attributed to backlogs and this figure remained nearly the same till October 2020.
Coming to the year 2021, surprisingly in the second wave of COVID-19, In March 2021, the monthly registrations hit a lofty figure of 17,324 companies. However, it slipped to 10,915 companies in May 2021. Interestingly, the Industrial law and compliance experts have douched the reasons behind the increase in the registration of companies. The reasons are
- Overall digitization of the economy
- Introduction of GST
- The E-Way billing system
That has created undue pressure on informal businesses specifically Micro, Small and Medium Enterprises (MSME) to come within the umbrella of the formal system to stay afloat.
“For a new company to stay in business and work with large corporations, GST has become the basic necessity. If you look at the new companies registered, they are predominantly MSMEs which is a clear reflection of the impact of GST and growing digitization, he added.”
Coming to the macro level, The total number of the companies registered in India touched a figure of 21.75 lakh companies at the end of May 2021 out of which 7.61 lakhs were closed. Consequently the number of active companies shooted up from 12.05 lakh companies in May 2020 to 13.65 lakh companies in May 2021. Of the 13.65 active companies
- Business Services possess the highest number of figures towering to 4.31 lakh companies being registered
- Then Manufacturing companies touched a lofty figure of 2.76 lakhs
- Trading at 1.75 lakhs
- And Construction stood at 1.11 lakhs
Read Also: Brief Procedure of MSME Registration in India
Coming to state figures, Maharashtra topped the list in terms of active companies touching a figure of 2.65 lakhs followed by New Delhi having 2.18 lakh companies and West Bengal stood at 1.33 lakh companies
“Despite the overall impact of Covid-19 on the Indian economy, there are several sectors viz. healthcare, consumer goods, and financial services which have remained largely unaffected. Technology-based companies, including start-ups across all sectors, have significantly mushroomed during this pandemic. These form a large part of the new company registrations during this period, said Jayesh Kothari, Associate Partner, DSK Legal.”
