Data from the ministry of corporate affairs (MCA) showed that 1.13 lakh companies were incorporated during the first nine months of the ongoing fiscal compared to 93,758 incorporations till December in FY20.
The reason behind the sharp growth was the progression of smaller firms and LLPs towards forming companies as growth picked up along with improved facilitation through digital services, a senior government official said.
“As businesses grow, they graduate from a proprietorship or partnership, to an LLP and some of them go on to form a company. The figures are a sign of the inherent strength in the economy and better facilitation,” they said.
After hitting a seven-year-high in July at 16,487, company incorporations stayed elevated above the 16,000-mark consistently till October, before declining to 13,453 in November, the MCA data showed.
The recovery was significant considering the figure had dropped to as low as 3,209 in April last year, the first full month after the lockdown started on March 25.
The pickup began as the unlock phase commenced with incorporations jumping to 10,954 in June 2020 from 4,835 a month earlier.
As part of its continued efforts towards improving the ease of doing business, the MCA was also working to get Delhi and West Bengal onboard to register professional tax through the MCA21 portal, the official said.
Currently the platform offers these services for the states of Karnataka and Maharashtra.
Apart from company incorporation, the MCA21 portal facilitates a range of services from opening of bank accounts, to the application of goods and services tax identification number, Employees State Insurance Corporation registration, among others.