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TMI BlogWebsite of MCA - some suggestions to make it more useful with greater transparencyX X X X Extracts X X X X X X X X Extracts X X X X ..... Website of MCA - some suggestions to make it more useful with greater transparency - By: - C.A. DEV KUMAR KOTHARI - Corporate Laws / IBC / SEBI - Dated:- 7-11-2009 - - MCA website: This is an important portal to get information about companies and directors and also for compliance with many provisions by way of e-filing of documents is found in form of www.mca.gov.in . As usual after teething troubles faced earlier many aspects have been streamlined and difficulties are reduced while working on or through this website. However, recently professionals experienced difficulties during peak hours and during time barring days in login, opening relevant pages , downloading and filing of documents due to low speed, heavy congestion etc. Thus capacity addition and improvement of software is desirable. Readers are well aware about this site, therefore, in this write-up only brief discussion is made and for more details readers can visit the website. Website of any organization, and particularly any government organization is now a very important tool for making available information about the organization and the relevant information about concerned parties with which the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain website of the organization is concerned. On the home page of the website of the website of Ministry of Corporate Affairs (MCA), various information regarding directors and companies are available for the general public in on-line/internet at its web address www.mca.gov.in / http://mca.gov.in/. On the right side on the top of the webpage we find some key words which convey the purpose and manner of achieving those purposes. In the following table, in column 1 those expressions are given and their significance is briefly discussed in column 2: Key words displayed on website. The significance of key words Empowering Business Information about companies on a website of GOI is meant for accuracy, reliability and transparency to public at large. These will definitely empower business due to improved information base about companies available to the public. Protecting Investors The information available about various companies, their reports and documents filed are important. Similarly information about vanishing companies, and legal provisions and scope of seeking redressal of grievances are for protection of investors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulator The MCA and its departments are working, in a limited way as regulator which can protect companies and its stake holders. However, in spite of such regulators, scams like in case of Satyam are shocking. Integrator MCA is an integrator in the sense that it can provide a common platform for concerned persons to share information and have some integration through common Facilitator MCA as a facilitator is also in a limited way- as per author it appears that MCA has become an improved facilitator through the website. Educator Website of MCA is a very important tool as an educator by making information available on the website and spreading information. However, more information and latest up dates are required to be updated more frequently. From the above table we find that through the website of MCA, the role of MCA can be played in much better manner then we found it when there was no such website. Functional utility of website: Purposes of the MCA are being achieved more effectively through its website. However, there is lot of scope in improvement of the website. The services of MCA to public at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large can be made more effective on improvement of the website, regular up gradation of its software, presentation and adding new information. The concept of LLP also require that there should be regular up gradation of system and information because once LLP become more popular, there is likely to be more interested person who will visit the website of MCA. About MCA: The information under the link about MCA is analyzed below: Primary concerns of MCA-administration of relevant laws framed for regulating the functioning of the corporate sector in accordance with relevant laws and by-laws. Supervision over the three professional bodies ICAI, ICSI, ICWAI. for proper and orderly growth of the professions concerned. MCA is also responsible for carrying out the functions of the Central Government relating to administration of Partnership Act, 1932, the Companies (Donations to National Funds) Act, 1951 and Societies Registration Act, 1980. Citizen's Charter about standards of services is analyzed below with some relevant observations: Acknowledgement: MCA shall acknowledge applications, returns and all communications within 7 days of their receipt. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knowledgment can be more quickly in most of the cases in fact acknowledgment should be promised instantly. In fact the time for processing and approval (after payment) can be stated. Expediency: to resolve complaints about delay in issue of allotment letters share/debenture certificates, refund of application money, delay in transfer of shares non payment of dividends/interest on shares/ debentures/fixed deposits etc. in close co-ordination with concerned agencies Comment- expediency can be defined. Time frame: MCA ensure that all applications submitted to the Ministry of Corporate Affairs, Regional Directors and Registrar of Companies are processed within the time frame. Comments: Time frames may be revised. Dealings: Be courteous, prompt, effective provide time bound services. All services shall be provided without charge or demanding any money other than remuneration prescribed by law. Comments: As usual in case of any government website lot of promises are made but when it comes to dealing with officers many times one may find truth in saying that "hathi ke dant dikhane ke kuch aur and khan eke kuch aur hoten hai". MCA is also not exception in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard. So far work done through the system is concerned the commitment Is correct. In case of scope practices of harassment are still being felt by corporate and dealing persons. Experience: It is true that after computerization of MCA and introduction of online filing functions and dealings have become much easier and prompt. However, still we find that scope of compelling people to meet them are found and in some situations it is un-necessarily required to visit offices of MCA to find out correct factual position and to complete the work. If full information is provided on line about what the company is required to do, the same can be complied with without visiting the office of MCA. Keeping documents in abeyance without assigning reasons (on the website is a means of inviting people to MCA). In case reasons for keeping any document is mentioned the same can be resolved on line. In case the concerned officer wants some clarification or document, the matter can be clearly mentioned on the website so that one can attend the matter as may be necessary. Simply displaying held /kept in abeyance is not a good practice. Difficulties faced in viewing website: Many t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imes we experience difficulties in visiting website, accessing different pages, delayed opening of pages, time consuming process of uploading forms and other information etc. This happened acute during office hours and particularly when corporate face a time limitation to file documents. These need to be addressed by MCA on urgent basis because info-base is increased and is bound to increase with filing of any new documents. The website must be capable to effectively handle the info base not only for data storage but also for accepting and providing information quickly. More information and better facility for search and downloading of information is required for improvement of the website for effectively achieving its purposes. General: In the website of MCA various information regarding MCA, offices and officers of MCA, companies and its directors are available for the general public. Through link 2 1services , several services, like application for DIN, acquisition and registration of Digital Signature Certificate (DSC) for directors, professionals , manager or secretary, track transaction status, track payment status, find CIN/GLN no., company's master data, calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of fees for different forms and so on , are available. Other information regarding companies directors, company's master data, facility of downloading the pre requisite software for e-filing/ uploading of different forms on website, registration of users for e- filing, training to filling up the form and uploading on the site and facility of downloading and uploading of all the forms relating to Companies Act and Rules, are also available on the site. Information about LLP's has also been added. About Directors: There are different categories of directors, officially we find following type of directors: A. Promoter director or directors in control of company (singly or including relatives and associates of the director). B. Professional director- they may be partly working directors or non working directors. C. Employee director - who are in regular employment of company or other companies of promoter directors and are nominated as directors by promoters,. D. Independent directors- they are so called however, how much independent they are will be proved only in due course of time. Directors are key person of the company. They control the main pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icies and administration of the company by themselves and/or with the help of key employees of the company. They are primarily responsible for the working of the company. In case of any default or otherwise, the directors should be held responsible. The legal aspect and the ground realities: Legally it is correct that company is a separate legal entity and shareholders and directors may come and go the company continues. In case of large companies managed by professional teams it should not make much difference on management of company in long-term. However, reality is a company is looked on together with its promoters. Depending on changes in promoters or their interest, the fortunes of companies may change. Even banks and financial institutions need to consider the goodwill and financial strength of promoters - they also rely on personal guarantee of promoter directors. We find that even in case of government companies, a change in government or even a change in ministers or chief secretaries of concerned ministry make a difference on working of companies and also its share prices. With some new persons taking charge new expectations come and with outgoing persons som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dreams may die. For example, we can take clue from changes in the ministry of railways during last twenty years and find different shades and colors in the approach with which different ministers have worked and in the manner in which public is affected due to such changes under different ministers. So when the largest public service provider with a huge organization can be affected by the approach of the Minister of Railways, how corporate can remain unaffected by changes in its promoter directors. CIN and companies: By name of company we can search company's CIN ( company identification number) and then we can find details filed with ROC. Some documents can be viewed freely and for some documents fees need to be paid which can be paid online and then documents can also be saved. Directors, DIN and MCA website: In MCA website, directors are identified by the DIN number. DIN means Director Identification Number allotted by MCA to the directors. A person who is a director or proposed to become a director of any company, should apply to MCA for allotment of DIN. In application form of DIN the applicant should provide the following details: 1. Name with proof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of identity and photograph duly certified. 2. Address, with proof thereof duly certified. 3. Father's name. 4. Date of birth with proof thereof with certification. Certification of information to be furnished is to be by any practicing CA, CWA or CS. A person in every company in which he is a director should furnish his DIN to the company for the purpose of filing of Form 32 with MCA. The main purpose of the DIN is to keep complete information of Directors with MCA so that there is an administrative and moral check. In case of any need for administrative purposes as well as in case of defaults, frauds, misappropriation of funds of the company, the director can be easily identified and held responsible by MCA. Information about directors at website: On MCA website, DIN of the directors is displayed only through the link of authorized signatory or directors details of any company. In form 32 also complete details of directors is displayed after entering the CIN number of the company and DIN number of the directors in their respective place. Search and further information: If anyone want to know completely about Mr. Director, by his name or by his DI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N it is presently not possible on the website of MCA. It is suggested that there should be complete information on MCA website for convenience of the public in the search option (DIN and name wise) or through specific link. Some of the information should be displayed after entering the DIN number or director's name in the search option or going to specific link, such as:- 1. CIN, name, and address of all the companies in which a person is director. 2. Type of directorship and his share holding on a particular day. 3. All the past Directorships of the DIN holder. 4. Specific marking or highlighting of defaulter directors and companies in which he was or is a director. 5. List of the companies in which a person or DIN holder has made any default or fraud previously. 6. Display of list of promoter director, professional director and employee director separately. Each category of director in the company link should be shown separately. 7. List of companies in which DIN holder either individually or through/with his relatives holds significant shareholding say above 5% or Rs. five lakh of paid up capital in any company. 8. Relevant hyper-links - in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e details of a DIN holder hyper links may be provided for relevant information so that just by clicking the hyper link one can go to the relevant webpage. For example, in case of MR. Director (DIN 0001000) if a list of company in which he is director is given with hyperlinks by clicking name or CIN of any company one should be able to see information about that company. The benefits of above mentioned information: 1. The company will be able to independently know about the person who is or would be a director of the company. 2. The financial institutions, banks, and other financiers can get complete details of director and his other stakes and also about the person who actually controls the affairs of the company for cross verification of documents submitted by the companies by retrieving the information relating to the directors and the company from the website of the MCA before building any relationships with the company. In this way they will find a cross verification while scanning and screening the loan application of the company along with the documents submitted by the company. 3. Awareness among the investors also who are going to buy the shares, debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , bonds etc. of the company or making loans and deposits with companies. 4. Showing more authenticated picture to all concerned including several government agencies. 5. If each category of the directors could be shown separately, it will be easier for the financial institutions, banks, and other financiers to know extent of role of each director. They will be able to identify the person who is actually responsible for and interested in the fortunes of the company and extent of his interest. Other information and links.: As an illustration, in this write-up detailed discussion is made about DIN and suggestions are made for improvement in information available. Similarly other pages, links, hyper links for other information about nature of company, and related search and concerned persons can be made more comprehensive. Concluding remarks: More comprehensive information and easy search and access of information on website of MCA on different matters like companies, CIN, directors, DIN holders. Share holding, various documents filed by companies, pendency of matters in case of any company, proceedings pending against DIN holders and companies etc. can be very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... useful means to bring in more transparency. In subsequent article the author will take up some other issues related with MCA website. Use of links and hyperlinks can make it more user friendly. More information and easy search and access will also improve transparency. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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