How the Ministry of Corporate Affairs Digitized Over 60 Million Pages of Annual Filings with eMudhra to Achieve a Legally Compliant, Paperless Ecosystem

Overview

The Ministry of Corporate Affairs dealt with a huge surge in the number of companies operating in India and this was only expected to grow. This resulted in huge challenges namely:

• Handle filings from about 600,000 companies in 2006 which has grown to 1,400,000 companies in 2015
• Increased turnaround times because of high volume and physical processing
• Lack of quick and transparent access to historic company data
• Increased real estate cost for storage and archival of records

To fast track the process of electronic document submission by companies to the Ministry of Corporate Affairs, a workflow-based solution was developed to allow authorized signatories of companies to digitally sign and submit forms for filing and approval—thus completely eliminating any physical paper movement.

It was envisaged that the solution provide a cost-effective process for digitally signing PDF forms with a legally valid Digital Signature Certificate which establishes the origin of the documents. The Digital Signature Certificate shall be issued by a Certifying Authority in India.

The solution shall also ensure that the documents are not tampered so as to ascertain the integrity of documents. All access to the system shall be with Digital Signatures to ensure complete traceability for audit purposes.

Business Needs

The Ministry of Corporate Affairs was dealing with a volume of 60 million sheets of paper in 2006 for annual filing by approximately 600,000 companies. The ministry wanted a secure long-term solution to achieve a truly paperless environment that meets compliance & regulatory requirements.

Approach

Develop an integrated solution to allow companies to digitally sign periodic and annual filings that are legally binding and guarantee authenticity, integrity, and confidentiality of data.

Digital Signatures to ensure complete traceability for audit purposes.

Digital Signature Technology

The Digital Signature Technology works on the Public Key Infrastructure framework which uses a Cryptographic Key Pair – Private and Public Key for secure access and transmission of information.

The Public Key Infrastructure framework is prescribed in a model law provided by UNCITRAL (A United Nations body) for International Trade and Commerce.

Ministry of Corporate Affairs — e-Governance Initiative

Government of India under the MCA21 e-Governance initiative undertook efforts to completely digitize and go paperless with company filings which are handled by the Ministry of Corporate Affairs. The Ministry is the official agency that deals with the administration of Companies Act in India.

To fast track the process of electronic document submission by Companies, a workflow-based solution was developed to allow authorized signatories of Companies to digitally sign and submit forms for filing and approval—thus completely eliminating any physical paper movement.

It was envisaged that the solution provide a cost-effective process for digitally signing PDF forms with a legally valid Digital Signature Certificate which establishes the origin of the documents. The Digital Signature Certificate shall be issued by a Certifying Authority in India.

The solution shall also ensure that the documents are not tampered so as to ascertain the integrity of documents. All access to the system shall be with Digital Signatures to ensure complete traceability for audit purposes

eMudhra Solution

eMudhra being a Licensed Certifying Authority in India and a PKI Solution provider issues Digital Signatures to Directors of Companies for document filings with the Ministry of Corporate Affairs. As a Certifying Authority, eMudhra verifies the identity of the individual as part of the Know Your Customer guidelines before issuing a Digital Signature Certificate. Therefore, every digital signature used by Directors provides traceability and is legally valid in lieu of physical/wet signatures.

By using Digital Signatures in PDF documents, the solution was able to validate the signer and contents of the document before accepting submission. This ensured error-free filing of documents with the Ministry of Corporate Affairs.

The usage of Digital Signatures has now been extended to Income Tax filings by Companies, Customs Department, e-Procurement, State Value Added Tax, Service Tax and several Government to Citizen Services in India.

Benefits

Today the Ministry of Corporate Affairs has reaped significant benefits by implementing digital signature-based submission of documents. These include:

• Ensuring document integrity, confidentiality, and authorship
• Curbing the risk of signature forgery
• Eliminating the use of papers and printers, saving huge cost
• Offering anywhere, anytime filing of forms
• Faster turnaround time, increased employees' efficiency, productivity and transparency
• Meeting compliance & regulatory requirements
• Going green and reducing carbon footprint in line with the vision of the Country