MCA's Major Overhaul: Reducing Litigation to Boost Corporate Efficiency

The Ministry of Corporate Affairs (MCA) has initiated measures to lessen litigation under company laws. Actions include withdrawing prosecutions and compoundable cases, with a focus on serious offences. These steps aim to ease the judicial burden and enhance corporate governance, as stated by Finance Minister Nirmala Sitharaman.

The Ministry of Corporate Affairs (MCA) has initiated significant measures to reduce litigation under company laws, Finance Minister Nirmala Sitharaman announced Monday.

Addressing Lok Sabha, Sitharaman detailed that 14,247 prosecutions were removed in a 2017 special drive, with 7,338 compoundable cases identified for withdrawal in 2023. 'Till July 15, 2024, a total of 6,294 withdrawal applications were submitted to various courts. Nonetheless, serious or non-compoundable offences will still face prosecution,' she emphasized.

She highlighted that the MCA efforts, including decriminalizing 63 offences, aim to alleviate the judicial system's burden by addressing only serious cases and improving the ease of doing business. The government has also introduced zero fees for company incorporation with authorized capital up to Rs 15 lakh, centralizing registries, and processing centers to streamline operations.

(With inputs from agencies.)