MCA 21

An e-Government Initiative
Divya Jain
Enrolment No. 9810021
12/11/2010

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

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.
 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 on
March 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. A
comprehensive 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.

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. In
the 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 Restrictive
Trade Practices Act 1969. Besides, it also administers the following Acts:
 (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.
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.
· 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.
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.
 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.
· 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.
 EMPOWERMENT - MCA 21

TECHNOLOGY EMPOWERS TRANSPARENCY – Empowering

Stakeholders
It has been the Government’s 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
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 compliance –
as a blend of well-defined goals and performance metrics. MCA21 has by now evolved to
provide key learning’s 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.
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 system
performs 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 the
director 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
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-à-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
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