The incorporation of limited liability partnerships (LLPs) continued to surge-barring a one-off drop in May after many months-and leaped 73% in June from a year earlier.
A senior government official termed the latest increase “encouraging” and a “vote for the country’s growth prospects” over the medium-to-long term.
The data showed 15,375 companies, including foreign ones, were registered in June, compared with 13,696 a year before. As many as 6,362 LLPs were incorporated in June, against 3,672 a year earlier.
The June rise offset the fall in company incorporation in the previous two months. A total of 47,438 companies were registered in the June quarter, up marginally from 47,318 a year before.
The registration of LLPs jumped almost 29% in the June quarter to 17,722. Factors, including strong economic outlook, bullishness in the Indian stock markets, relaxed foreign direct investment rules and the government’s bid to ensure greater ease of doing business, have spurred investments and driven up the incorporation of companies and LLPs, according to Noorul Hassan, partner at law firm Lakshmikumaran & Sridharan. “Large consumer base of India and the availability of resourceful manpower are other important factors,” Hassan added. Ruhi Jain, executive director (corporate compliance) at IndusLaw, said conducive business environment, easy access to a large consumer base, improving infrastructure and financial inclusiveness, on top of regulatory simplifications and digital and other initiatives, have helped draw businesses. Meanwhile, robust prospects of services trade, both internal and external, and the booming services economy after the pandemic debacle are also driving up LLP registrations. Services exports in the first quarter of this fiscal rose over 12% from a year before to $90.4 billion, against almost 6% rise in the outbound shipments of goods.In 2023-24, 16.3% more companies and 62.7% more LLPs were incorporated than in the previous year. A record 185,314 companies and 58,990 LLPs were incorporated in 2023-24. The base effect, therefore, turned unfavourable for the computation of growth in the company incorporation in 2024-25, especially in the first two months of this fiscal, experts have said. The impact of the general election, too, weighed on the registration in April and May. However, once the polls were over, the longer-term growth prospects again influenced the incorporations, they added.
The economy grew at a higher-than-anticipated pace of 8.2% in the last fiscal year.
