Ease Of Doing Business In India And The Role Of Legal Firms
World Bank's recent report on 'Ease of Doing Business' ranks India at a meagre 130th position amongst 189 countries. While this is 12 places higher than last year, India is still ranked behind parallel economies like Brazil(116), China(84), South Africa(73) and Russia(51). Prime Minister Modi's push for getting investments into India with on ground policy changes has made India more business friendly than before. The same report also encouragingly mentions that the average number of days to start a business in India has come down to 29 from 127 last year. Nonetheless, policy changes in the past year suggest that India is going in the right path.
The Government has made a number of policy changes so that it becomes easier for entrepreneurs to start and operate their businesses in India. The introduction of Form INC 42 in May 2015 merged the process of getting Director Identification Number (DIN), Name Approval and Incorporation application into one single process. This simplifies and fast tracks the company registration process in India. The Companies(Amendment) Bill, 2015 has boldly decided to remove the minimum paidup capital requirement that was previously INR.1 lakh for private limited companies and OPCs (One Person Company)and INR.5 lakh for public limited companies. So, a young entrepreneur who had to issue share capital worth INR.1 lakh previously can now issue even INR.5000, which majorly reduces the cost of starting up.
If media reports are to be believed,
Legal documentation is one of the top priorities for any stable business
Role of Legal Firms
As India turns business friendly it will provide a boost to entrepreneurs dreaming of starting their own venture and those who are already in the industry. Legal firms would play a very pivotal role in the process. The legal industry in India has been cluttered and non standardized since time immemorial. This lack of clarity becomes a hassle for entrepreneurs to navigate their way through legal paperwork and establish their businesses.
To achieve scale and efficiency in administering legal requirements, technology is the likely enabler to make sure that legal services firms can reduce cost & time for the entrepreneur. Co-Founders should spend maximum time & energy to develop a strong product offering rather than legal documentation and accounting. And most startups do not usually have resources to maintain a dedicated legal inhouse team. It is at this juncture that these legal tech firms can make their mark. These legal tech firms are providing services such as company incorporation, trademark & patent registration, tax filing, while some are also providing an online marketplace for legal and tax professionals. The major reason these services are in vogue among entrepreneurs in India is the value for time and money. As all these services are provided online, entrepreneurs can avail them from any part of the country, without having to actually meet these lawyers face to face. All they need to do is to scan and upload the relevant documents and the rest is taken care of by the legal firm. To provide further customization of legal services, an online marketplace of legal and tax professionals will bring together large communities of legal professionals. Many lawyers and chartered accountants are joining this marketplace to gain access to new businesses boosted by the power of internet aggregation. This in turn is lowering down the prices of the services provided and bringing in a fair amount of standardization.
Legal documentation is one of the top priorities for any stable business and now that technology is being leveraged to make the processes simple and hassle free. India is becoming an even more conducive environment for businesses to operate.