Daily News Analysis

Centre for Processing Accelerated Corporate Exit (C-PACE)

stylish_lining

Centre for Processing Accelerated Corporate Exit (C-PACE)

The Centre for Processing Accelerated Corporate Exit (C-PACE) has been set up to streamline and expedite the process of company closures in India. The initiative aims to significantly reduce the time required for the voluntary winding-up of companies, bringing the process down to 70-90 days.

Key Objectives and Functions

  • Accelerated Process:
    C-PACE aims to expedite the
    voluntary winding up of companies within six months, a crucial step towards improving India's business environment by providing businesses with a swift exit option.

  • Inclusion of LLPs:
    Since
    5th August 2024, C-PACE has been empowered to process eForms related to the striking off of Limited Liability Partnerships (LLPs), expanding its scope beyond companies.

  • Ease of Doing Business:
    C-PACE is part of the Ministry of Corporate Affairs' (MCA) broader initiative to enhance the
    Ease of Doing Business in India. It eliminates the need for physical interactions with stakeholders, simplifying the process through digital and centralized mechanisms.

  • Under the Registrar of Companies (RoC):
    C-PACE operates under the
    Registrar of Companies (RoC), an office under the MCA, which has the authority to strike off companies from the register under Section 248 of the Companies Act, 2013.

Key Legal Provisions

  • Companies Act, 2013:

    • Section 248 of the Companies Act, 2013 grants the RoC the power to remove a company’s name from the register of companies, effectively closing it down.

  • Voluntary Liquidation:

    • The process of voluntary liquidation has been streamlined under Section 59 of the Insolvency and Bankruptcy Code (IBC), which no longer requires intervention from the National Company Law Tribunal (NCLT) to initiate the process.

Global Context and Comparison

  • In India, the timeline for voluntary company winding up has been reduced to 70-90 days, compared to:

    • United States: The voluntary winding up process takes about 90 to 180 days.

    • Germany: The process can take more than a year.

This makes the Indian process much faster than that in many developed economies, thereby enhancing India's attractiveness as a business destination.

Significance

  • Efficiency: C-PACE helps reduce bureaucratic delays, making it easier for companies to exit the market when they choose to wind up voluntarily.

  • Encouraging Entrepreneurship: A faster exit mechanism encourages entrepreneurs to take business risks, knowing that a quick exit option exists if the venture does not succeed.

  • Supporting Ease of Business: By simplifying the closure process, C-PACE contributes to India's overall ease of doing business rankings, making it easier for foreign investors and domestic entrepreneurs to operate.

Conclusion

C-PACE is an important step towards improving the business ecosystem in India by ensuring a fast, efficient, and transparent process for the voluntary closure of companies and LLPs. By reducing the time and complexity involved in company closures, it enhances the Ease of Doing Business and provides a more predictable environment for businesses.


 

India-UK Vision 2035

The Indian Prime Minister's visit to London was indeed a significant diplomatic milestone, as it unveiled the India–UK Vision 2035 roadmap and formalized the Comprehensive Economic and T
Share It

Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989

The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 is a critical piece of legislation designed to protect the rights and dignity of Scheduled Castes (SCs) and Scheduled
Share It

Financial Inclusion Index

The Financial Inclusion Index (FI-Index), as reported by the Reserve Bank of India (RBI), is a key metric that measures the level of financial inclusion across the country. Overview of the Fin
Share It

International Seabed Authority

The International Seabed Authority (ISA) is currently in the midst of negotiations regarding the extraction of metals from the high seas, particularly as U.S. efforts to fast-track this practice h
Share It

Election of Vice-President of India

Article 64 of the Constitution of India specifies that the Vice-President's post cannot remain vacant for any period of time, as it is essential for the functioning of the Rajya Sabha (Council
Share It

Maharashtra Scraps Hindi as Compulsory Third Language

The Maharashtra government recently scrapped its Government Resolutions (GRs) that mandated Hindi as a compulsory third language from Grades 1 to 5 in Marathi and English medium schools. While the
Share It

River Pollution in India

The Delhi government's focus on cleaning up the Yamuna River is part of a larger national effort to rejuvenate the Ganga River and its tributaries, in alignment with the Namami Gange Programme
Share It

Infrastructure Failures

The recent collapse of the Mahisagar River Bridge in Vadodara, which tragically claimed the lives of 20 people, underscores the growing concern over India's infrastructure quality. Similar
Share It

Special Intensive Revision (SIR)

The Supreme Court (SC) is currently reviewing the Election Commission of India’s (ECI) process for the Special Intensive Revision (SIR) of electoral rolls in Bihar, suggesting that Aadhaar,
Share It

GM Crop

In ongoing trade talks, the United States is advocating for India to open its agriculture market to genetically modified (GM) crops. However, India has firmly rejected this proposal, citing concer
Share It

Newsletter Subscription


ACQ IAS
ACQ IAS