Incorporation of new companies indicates positive sentiment

As many as 0.17 million companies were incorporated in 2021-22, the highest number ever, and this record is expected to be broken in the current fiscal. Investor interest has largely been in business services, manufacturing, community personal & social services and trading.

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A large number of measures announced by government to encourage and promote domestic industry and entrepreneurship has boosted investor interest. The pace of incorporation of new companies in the country indicates that investor interest is robust.

Data released by the Ministry of Corporate Affairs showed that a total of 16,072 companies were registered in December 2022. The aggregate paid-up capital of the newly registered companies stood at Rs 617.42 crore. According to the monthly data-report, an overall increase of 25% in the number of new registrations was recorded in December, when compared to November 2022. In November, a total of 12,844 companies were registered. December’s company registration is second only to May, when 16,513 companies were registered.

Sector-wise, the largest number of companies were registered in business services (26%) followed by manufacturing (19%), community, personal & social services (14%) and trading (12%) in December. As many as 0.17 million companies were incorporated in 2021-22, the highest number ever, and this record is expected to be broken in the current fiscal.

According to reports, people are preferring to get incorporated as ‘a company’, irrespective of the increased reporting and compliance requirements. People can now apply for incorporation as a company for about 11 services including issuance of PAN, TAN and allotment, of GSTIN. Incorporating as a company also facilitates easy access to bank credit and other means of financing.