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MCA 21

An e-Government Initiative

Divya Jain

Enrolment No. 9810021

12/11/2010

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE


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Contents

Introduction ......................................................................................... Error! Bookmark not defined.

Objective .............................................................................................. Error! Bookmark not defined.

Scope ................................................................................................... Error! Bookmark not defined.

Benefits ................................................................................................ Error! Bookmark not defined.

Overview of MCA set up ....................................................................... Error! Bookmark not defined.

The Services Available under MCA21 Project ........................................ Error! Bookmark not defined.

The SHIFT ............................................................................................. Error! Bookmark not defined.

E-FILING PROCESS ...........................................................................Error! Bookmark not defined.

Accomplishments ................................................................................. Error! Bookmark not defined.

TECHNOLOGY EMPOWERS TRANSPARENCY Empowering Stakeholders............ Error! Bookmark not

defined.

Benefits to stakeholders ....................................................................... Error! Bookmark not defined.

References ........................................................................................... Error! Bookmark not defined.


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MCA21 e-Governance Project

The Ministry of Corporate Affairs has implemented an e-Governance initiative known as

MCA21 e-Governance Project. It is one of the Mission Mode Projects of the Government of

India under the National e-Governance Plan. The Project offers availability of all registry

related services including filing of documents, registration of companies and public access to

corporate information through a secure interactive portal. The portal services can be

accessed from anywhere, at any time that best suits the corporate entities, professionals

and the public at large. Thus MCA21 has led to efficient delivery of services and supervision

of corporate processes through the use of modern information technology.

The objective of the e-governance program is to improve the speed and certainty in delivery

of MCA services in a transparent manner. This improvement is ensured primarily through

the mechanism of secure electronic filing (e-filing) and easy online payment for all the

services provided by the Registrar of Companies. It is, therefore, a significant step towards

an end-to-end paperless delivery of the Government services with widespread use of Digital

Signature to carry out e-filing in a secure manner in conformity with the Information

Technology Act, 2000. Starting with the launch of the first pilot on February 18, 2006 from

Coimbatore and the major launch of the second pilot from Delhi by the Prime Minister onMarch 18, 2006, the programme was rolled out at all the Registrar of Companies locations in

a phased manner by September 4, 2006. Electronic filing, using Digital Signatures, was made

compulsory from September 16, 2006 with the amendment in the Companies Act, 1956. The

facility for online payment through Credit Card and Internet Banking has also been provided

on the portal through a secure payment gateway, to ensure prompt recognition of payment

and delivery of services.

The project has a sound foundation in its conceptualization, solution architecture, a sound

BPR and deliverables measured through a strict regimen of service level benchmarks. Acomprehensive outcome based project with focus on service delivery, the project envisages

benefits for various categories of stakeholders

Business: enabled to register a company and file statutory documents quickly and easily,

and in a manner that is convenient.

Public: to get easy access to relevant records and get their grievances redressed

effectively, Professionals: to be able to offer efficient services to their client companies.

Financial Institutions: to find registration and verification of charges easy.


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MCA: to ensure proactive & effective compliance of relevant laws and corporate

governance.

Employees: Enabled to deliver best of breed services. The solution architecture provides

for a Data Centre, which has been set-up at Delhi, a Disaster Recovery Centre at Chennai. Inthe event of any technology break-down or disruption of services from the Data Centre, the

services can be restored within a time-frame of 12 hours by taking recourse to the Disaster

Recovery Centre. The project has been designed with provision for interoperability and

interface with other Government Departments and Ministries.

The SCOPE

The scope of MCA21 project covers only the offices of RoCs, Regional Directors and the

Headquarter at New Delhi. It does not include other offices of MCA like Official Liquidators,

Company Law Board / Tribunal and Courts. The success of the service-oriented approach,

the most fundamental ingredient of this project, will depend greatly on analyzing and

responding to the needs of all stakeholders. To that extent, the project will develop a

mechanism to constantly develop and improve the MCA21 system. It will be made possible

by analyzing usage patterns and error/status messages as well as feedback from the

customers comprising the corporates, professionals and the public.

BENEFITS

The Key Benefits of MCA21 Project MCA21 seeks to fulfil the requirements of the various

stakeholders including the corporates, professionals, public, financial institutions and banks,

Government and the MCA employees. The key benefits of MCA21 project are as follows:

On-line incorporation of companies Simplified and easy mode of filing of Forms/ Returns Registration as well as verification of charges anytime and from anywhere Inspection of public documents of companies anytime from anywhere Corporate-centric approach Building up a centralized database repository of corporates operating in India Enhanced service level fulfilment and customer relationship building Total transparency through eGovernance Timely redressal of investor grievances Availability of more time for MCA employees for qualitative analysis of corporate

information

An Overview of MCA set up

The MCA mainly administers the Companies Act, 1956 and The Monopolies and RestrictiveTrade Practices Act 1969. Besides, it also administers the following Acts:


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(a) The Competition Act, 2002

(b) The Chartered Accountants Act, 1949

(c) The Costs and Works Accounts Act, 1959

(d) The Company Secretaries Act, 1980

(e) The Partnership Act, 1932

(f) The Societies Registration Act, 1860

(g) The Companies (Donation to National Fund) Act, 1951

The MCA functions under overall direction and supervision of the Ministry of Corporate

Affairs, has a three tier organizational set-up for administration of the Act, namely, the

Headquarter at New Delhi, the Regional Directors at Mumbai, Kolkata, Chennai and Noida

and the RoCs in States and Union Territories.

The Official Liquidators who are attached to various High Courts functioning in the country

are also under the overall administrative control of the Ministry. The Company Law Board, a

quasi-judicial body, has its Principal Bench at Delhi, an additional Principal Bench for

Southern States at Chennai and four Regional Benches located at Delhi, Mumbai, Kolkata

and Chennai.

The four Regional Directors are in-charge of the respective regions, each region comprising a

number of States and Union Territories. They supervise the working of the offices of the

RoCs and the Official Liquidators working in their regions. They also maintain liaison with

the respective State Governments and the Central Government in matters relating to the

administration of the Companies Act.

Certain powers of the Central Government under the Act have been delegated to the

Regional Directors. There is also an inspection unit attached to the office of every Regional

Director for carrying out the inspection of the books of accounts of Companies under

Section 209A of the Companies Act.

RoCs appointed under Section 609 of the Companies Act and covering the various States

and Union Territories are vested with the primary duty of registering companies in the

respective States and the Union Territories and ensuring that such companies comply with

statutory requirements under the Act.

These offices function as registry of records, relating to the companies registered with them,

which are available for inspection by members of public on payment of the prescribed fee.

The Central Government exercises administrative control over these offices through the

respective Regional Directors.


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The Services Available under MCA21 Project

The following services are available under the MCA21 Project:

Registration and incorporation of new companies

Filing of Annual Returns and Balance Sheets Filing of forms for change of names/address/Director's details Registration

and verification of charges

Inspection of documents Applications for various statutory services from MCA Investor grievance redressal

The Organization of RoC Office under MCA The RoC office working from its present address

has virtually become the Back Office of the Ministry. Keeping in mind that a number of

companies/ entities may find it difficult to switch over to eFiling at the initial stage,

Facilitation Centres known as Registrar's Front Offices (RFOs) have been set-up at 52

locations throughout the country to provide requisite comfort for eFiling to such companies.

The Front Office (FO) The Front Office represents the interface of the corporate and public

user with the MCA21 system. This comprises of Virtual Front Office and Registrar's Front

Office. Virtual Front Office merely represents a computer facility for filing of digitally signed

eForms by accessing the MCA portal through Internet. It also pre-supposes availability of

related facilities to convert documents into PDF format through scanning of documents

wherever required. When a company or user does not have these computer facilities, it can

avail of these facilities at the designated facilitation centres, known as the Registrar's Front

Offices.

The Virtual Front Office (VFO) Virtual Front Office implies availing services offered under the

MCA21 project online by the user through Internet from his/ her home or office. Virtual

Front Office facilitates anywhere, anytime services for filing of eForms. The system

automatically does pre scrutiny of the eForms filed and indicates error messages in case of

incomplete or invalid particulars. Upon successful submission, a Service Request Number

(SRN) is generated by the system for the user, which can be be used for future

correspondence with MCA.

The SHIFT

The MCA 21 program has brought about a paradigm shift in citizens facing interactions with

the Ministry by bringing services to the doorstep of stakeholders.

e-Filing Services - download/upload of eForms, tracking transaction status, pre-scrutiny of

forms before filing, calculation of filing fee, resubmission of eForms for rectification of

errors.


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Document Related Services - obtaining Certified copies, inspection of public documents,

On Demand Scanning of document not available in electronic repository.

Payment Related Services - online payment of fee through Credit Card or Internet banking,

generation of challan for payment of fee at bank counter, tracking payment status.

Data Related Services like finding Corporate Identity Number (CIN), checking/searching

Company Name, view Company Master Data, view Index of Charges, view Authorised

Signatory Details.

Role Check Services - registration of DSC (Digital Certificates) on MCA portal by Directors,

Practicing Professionals, Managers and Secretaries, self user registration as Registered or

Business User, View Signatory Details.

DIN (Director Identification Number) Related Services - Apply for DIN , Check DIN

Application status, Retrieve DIN application, Generate DIN approval letter online.

Annual Filing Related Services - Filing and checking Annual Filing Status of the company.

Investor Grievance related Services - Lodging of complaints against companies by the

Investor, Track Complaint Status.

Informational Services - Contact details of MCA offices, Addresses of Authorized Bank

Branches for making Challan Payment, Addresses of MCA21 Facilitation Centers, Contact

details of Certifying Authorities for procuring Digital Signature Certificate (DSC).

Feedback Management - Resolution of queries through email by MCA21 Email Helpdesk,

Helpline numbers for resolution of telephonic queries, Outbound calling for professionals

regarding latest MCA updates, maintaining records of all email/ telephonic queries with

solution provided.

The implementation of the programme has been remarkably smooth with the transition

having been facilitated through a well structured communication plan with the external

stakeholders and training & hand-holding of the MCA employees. Keeping in view that the

stakeholders including corporate entities and the public may face certain difficulties in the

beginning in switching over from the manual filing system to an electronic filing system, a

network of facilitation centres at 52 locations throughout the country has been set-up.

These facilitation centres provide complete range of services for e-filing of documents to the

stakeholders who do not have the necessary computing/IT infrastructure or capability to use

the same for e-filing from their own locations. The Project provides for continuation of this

support for a period of three years from the Project Implementation Completion date

without any charge to the stakeholders.


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Besides a network of state-of-the-art Facilitation Centres at 52 locations where facilities for

e-filing have been made available free of any charge throughout the country, a scheme for

Certified Filing Centres (CFCs) managed through the practising professionals was introduced

following the concept of user charges. About 900 such CFCs have been authorised

throughout the country.


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MCA21

MCA21 has changed the way citizens and companies interact with MCA now. The companies

can now interact online with MCA instead of the in-line, with serpentine queues

especially during the peak filing season (October December every year). MCA21 has

created an overall positive environment amongst stakeholders and its adoption can be

gauged as MCA21 portal is getting 3 million hits / day.

The major program accomplishments are:

Introduction of anywhere, anytime secure electronic filing for MCA transactions through

adaptation of all statutory forms to e-forms, suitable for electronic filing.

Feature for automated scrutiny of e-forms at the MCA portal, that can substantially reduce

the commonly associated mistakes encountered in form filling by the applicant.

Use of Digital Signatures to ensure the security of electronic forms and documents in

conformance with the Information Technology Act, 2000.

Verification of the credentials of the authorized signatory (Director, Company Secretary or

Manager and Practicing professional) through an additional role check function, with

another established identification such as DIN, PAN or Practice number provided by the

Institute.

Convenient multi-modal methods of payment encompassing existing payment mechanism

and electronic payment options using credit cards and Internet banking, including an

expanded nationwide network of Bank branches for challan payments.

Access to the MCA services optimized for use from a typical home Internet connection,

with freely available software, where the end user need not incur additional costs for

software components.

Best-in-class information technology solution, including electronic workflows and

sophisticated document storage and retrieval systems, that can significantly reduce paper at

the MCA Offices.

52 ROC (Registrar of Companies) Front Offices located across the country that provide

facilitation services for electronic filing, free of charge.

Nearly 900 Certified Filing Centres, operated by practicing professionals from the Institutes

of Company Secretaries, Chartered Accountants and Cost Accountants, who provide MCA

services for a nominal, prescribed fee.


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Nearly 5 crore pages of legacy corporate paper documents digitized for ready electronic

access through Internet to the investors and general public.

Easy and comprehensive reporting of grievances by investors through MCA portal, which in

turn can facilitate speedy redressal.

An architectural approach that allows easy adaptation of evolving technologies and

platforms, while providing the robustness and scalability to the MCA21 solution.

National Data Centre located at New Delhi that provides uninterrupted 24 x 7 operations.

High bandwidth connectivity across all nationwide offices of MCA and facility for access by

several thousand users at the same time.

Disaster Recovery centre at Chennai, with a facility to restart operations within 12 hours in

the event of a natural or man-made disaster.

A fully automated, secure Straight-through-Process has been introduced in MCA21, that

takes on record some of the statutory filings without any human intervention. This move

has enabled re-focusing of effort on core tasks that help quicker turnaround of business

critical service requests.

Brought in total transparency in the working whereby citizen can themselves find out the

status of their transactions. It has become so convenient for the citizen that the relevant

certificates and letters are auto generated and delivered through electronic Mail. These

certificates and letters are also made available to them on the portal in a secure manner.

Green Project: MCA21 has achieved the distinction of becoming the first project that has a

demonstrable track record of paper reduction.

The Government awarded the Prime Minister Award for Excellence in Public

Administration to the members of the Project team on the occasion of the 4th Civil Services

Day held on April 21, 2009.


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EMPOWERMENT - MCA 21

TECHNOLOGY EMPOWERS TRANSPARENCY Empowering

Stakeholders

It has been the Governments endeavour to facilitate the maintenance and growth of a

healthy business eco-system that can meet stakeholder aspirations. It is particularly relevant

at this juncture considering the growth in the number of companies from about 30,000 in

1956 to more than 8 lakh at present.

The Ministry of Corporate Affairs (MCA) has the only authentic information repository on

the corporate sector of the country and serves as the registry for all transactions by the

companies under the Act and filing of annual and event-based statutory documents.

Exceptionally high growth in the number of companies during last one decade following the

policy shift favouring economic liberalization, a reducing trend in the number of employees

and the paper-based mode of business transactions with various registries was proving to

be inefficient and leading to emergence of undesirable practices. Offices of the Registrars of

Companies (ROCs) were becoming paper dump yards, company representatives and

professionals providing services to the corporate sector were required to physically visit the

ROC offices, peak filing seasons would witness unending serpentine queues involving a huge

waste of time and effort, regulatory functions took a back-seat in the face of increased

volumes of work leading to low rate of compliance by the companies and ineffective

compliance management and monitoring on the part of the government. Public access to

company documents was becoming extremely tedious, costly and time consuming as it

required physical visits to ROC offices. Piecemeal computerization was not serving the

desired purpose. The inherent systemic inefficiencies led to delays in delivery of services

and the emergence of undesirable practices impacting transparency. The gap between the

expectations of the stakeholders, whowere increasingly becoming familiar with the

international practices, andthe ground realities in delivery of services was widening. It is in

this background that the Government decided to take a major initiative to transform the

situation in order to meet the expectations of the stakeholders in a globally competitive

business environment of the 21st century. Therein lies the genesis of the acronym MCA21.

The possibilities offered by technology to ease and simplify the interfaces between the

Government and the stakeholders have been effectively adopted to address this challenge.

MCA21 is a modernization and computerization program that aims at continuously

repositioning MCA as an organization capable of fulfilling the aspirations of its stakeholders

in a globally competitive business environment. Geared to provide anytime, anywhere


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services, efficiency is achieved by harnessing the right technology enablers. The piecemeal

computerization effort adopted in the past has been replaced with a comprehensive, end-

to-end service delivery oriented solution resulting in speed and certainty of delivery of

services. Besides simplification and improvements to the current ways of working, such an

approach has been able to bring about a fine balance between facilitation and complianceas a blend of well-defined goals and performance metrics. MCA21 has by now evolved to

provide key learnings on how the finite nature of paper based systems could be overcome

especially in a country with continental dimensions like India.

Strategies Adopted

Given the unique nature of requirements and the type of outcomes targeted in the face of a

very broad range of services, a big-bang strategy was adopted in MCA21 to migrate from a

paper-based process to a nearly complete electronic system (with the exception of a small

number of services where physical non-judicial stamp paper is still involved). The back office

operations in particular have been made completely paperless with the use of electronic

workflows and secure digital document repositories. Due to the project complexity, these

strategies were further broken down into sector-specific strategies, each addressing a

specific facet of the problem, as explained in the following paragraphs:

Service Delivery:

MCA21 is a departure from the conventional computerization approach involving

procurement of infrastructure and project related services. Instead, it has adopted a service

delivery model where the project operator would provide the desired service facilitation

through a clearly agreed service level agreement. This approach has enabled Government to

maintain focus on statutory and value-based aspects of the work while other tasks are

largely handled through use of technology.

Consultative and Team Approach:

In addition to the comprehensive, unambiguous technical specifications (inclusive of a

prototype), which ensured the viability of architectural and engineering aspects, the cross-

functional team also included experts from the business domain, financial modelling and

legal professionals who cohesively addressed the issues during the conceptualization stage.

Subsequently, a wide consultative approach was adopted (and continues to be followed) for

the development of e-forms with participation from the professional Institutes and

practising professionals i.e. Company Secretaries and Chartered Accounts.


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Modernization:

This involved two specific areas of improvement (a) modernization of offices and (b) process

re-engineering including revamping nearly 100 forms for electronic access, re-orientation of

work procedures to adapt to a technology enabled environment and migration of associated

data for electronic use. The process re-engineering is central to the way the new systemperforms to ensure speed and certainty in service delivery.

Change Management:

A number of internal and external change interventions including an extensive media

campaign were carried out over an extended period of time. The involvement of

professional institutes (Company Secretaries, Chartered and Cost Accountants Institutes)

and Industry Bodies right from the initial stage are noteworthy. To facilitate the transition

for the end user, especially the smaller companies, Facilitation Centres were set up at 53

locations to address the issues of digital divide free of any charges. Simultaneous action

was taken to introduce certain amendments to the Companies Act involving key enabling

provisions for electronic use and mandating electronic filing. Finding that the number of

Facilitation Centres could still be inadequate, a scheme of Certified Filing Centres (CFCs) was

introduced wherein the practising professionals were encouraged to provide these facilities

against a user charge. More than 900 CFCs were approved across the country.

Data Migration:

In order to enhance the utility of the system and empowerment of citizens and investors,

about 4.50 crore pages of legacy documents were digitized and inducted into the electronic

registry. These included permanent documents related to the companies and the subsisting

charge documents. These documents are available for online access to any user, thus

empowering the investors and citizens at large. In addition, the project also involved

introduction of a new concept of Director Identification Number (DIN) and building of thedirector data-base so as to easily identify defaulting directors, especially in case of

companies that vanish.

Innovative Methods Used:

An architecture based approach was adopted to define the solution. A building block called

the Gateway has also been introduced in the solution framework. This would enable

service interactions across other governmental systems as and when they are ready. This

feature will help the Government to think out -of-the-box in introducing single-window


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services that span multiple departments, a feature that can bring about reduction in the

number of transactions as well as simplification of work processes.

Electronic payment methods using credit cards and Internet banking have been introduced

in the system and these co-exist with the traditional challan based payment method over

the bank counter.

There are number of innovations that have been carried out in the area of electronic forms

(e-forms). These include elimination of repetitive data that was being sought from the

applicants, a facility of automated pre-fill of essential data that had to be mandatorily used

in some of the e-forms, a feature for automated pre-scrutiny and authentication of the form

through use of a Digital Signature Certificate (DSC) in accordance with the IT Act. All these

could be done using software that was available in the public domain where the end-user

did not incur any additional cost in procuring these software tools. As the data input in the

e-forms is authenticated through use of digital signatures by the authorized signatories of

the companies, this data is automatically transferred to the databases directly without any

human intervention. Further, a Straight-through-processing (STP) has also been introduced

where a large number of documents, not requiring any approvals, are taken on record

without human intervention with a secure technology driven process. The introduction of

electronic stamp papers, which has an external dependency on the States/ UTs, is being

currently taken up for resolution, thereby making the process completely paperless. The

viability of this approach is expected to bring about sweeping changes as this could be

harnessed fruitfully in a very large number of other e-Governance projects.

Benefits to stakeholders:

As a result of the above facility, an existing or potential investor can view the companies

performance on-line, the details about its Directors, its Annual Report and Balance Sheets.

The Profit and Loss Account in respect of Public Limited Companies is also available in the

public domain. A potential investor can carry out due diligence by taking recourse to the

facility and he is enabled to take informed investment decisions. The problems on account

of misplacement/ non-availability of documents have been fully addressed. One does not

need to physically visit the offices of the ROCs for the purpose leading to savings in time and

financial costs. The Banks and FIs can view and verify the status of charges vis--vis the

Companies which constitute major borrowers.

Integrity and security of documents:

Use of DSCs In order to ensure the non-repudiation of authenticity of the documents filed

and provide for features for integrity and security of documents filed, the use of Digital

Signatures (DSCs) has been mandated. The e-forms have to be digitally signed by the


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authorized signatory before filing the document and, wherever required, provision for

multiple DSCs has been made.

Role-check:Further, it was observed that even though the documents are being filed using DSCs, the

ministry had no way to verify the antecedents of the signatory. Now, this feature has been

introduced with effect from July 01, 2007 whereby the system of role-check of the signatory

has been implemented. The signatory is now required to register his DSC on the portal,

which is verified by the system against the DIN database created in respect of the Directors

and the professional database taken from the respective institutes of Chartered

Accountants, Company Secretaries and the Costs and Works Accountants. Thus the identity

of the signatory is fully established except in case of signatories from the Banks and FIs

whose database is not being maintained by the Banks and the FIs at any central location.

Steps are under way to find a resolution for this group of signatories also.

References

http://www.mca.gov.in

www.tcs.com

http://www.cio.in

http://www.icwai.org

http://prativad.com
http://www.mca.gov.in/http://www.mca.gov.in/http://www.cio.in/http://www.cio.in/http://www.icwai.org/http://www.icwai.org/http://prativad.com/http://prativad.com/http://prativad.com/http://www.icwai.org/http://www.cio.in/http://www.mca.gov.in/

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