Registrar of Companies’ deplorable service to the public
There have been many articles in the newspapers protesting against the annual license fee imposed on all companies of Rs. 60,000 upwards, with valid suggestions that this fee should be more reasonable. However, I wish to comment on this license fee in a different light. The Department of Registrar of Companies (ROC) is an inefficient organization and provides a deplorable level of service to its registered companies (clients). For example, to just obtain certified copies of forms filed it takes up to 2 months, even if there are no issues in the forms. Change of name takes a minimum of 10 weeks, and amalgamations take a minimum of 2 – 3 months.
Common excuses given at the ROC are:
4 Clerk is on maternity leave!
4 File is missing!
4 File has been sent for scanning!
4 Signature can’t be verified, so the director has to call over personally and re-sign documents!
These delays have a crippling effect on businesses, as registrations with statutory bodies, operating of bank accounts, etc get held up, which leads to growing frustration. Sadly, this inefficiency has also inevitably bred corruption within the ROC, where inducements are sought, in order to expedite the issuance of certified copies. In view of the above, the unbearable license fee becomes even more difficult to bear, when compared with the level of service received in return. Many businesses, especially Small and Medium Enterprises (SME) have opted to wind up. This is against the state policy of encouraging SME companies. One further point on the license fee: The ROC is insisting that this payment be made in cash or by bank draft. This reveals the lack of faith the government has, in its own banking system.
(The writer is a director of a company secretarial firm in operation for over 20 years who wishes to remain anonymous for obvious reasons ie. facing harassment in the same department in future for stating the obvious, despite all the hosannas about transparency and good governance).