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New company registrations fall 4.1% in August

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Banikinkar Pattanayak

, ET BureauLast Updated: Sep 10, 2024, 12:02:00 AM IST

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New company incorporations in India fell by 4.1% year-on-year in August, following an 11% decline in the previous month, according to corporate affairs ministry data. Despite this, the medium-to-long term economic growth prospects remain strong. In contrast, limited liability partnerships (LLPs) saw a 22.1% increase in registrations for August and a nearly 26% rise between April and August, driven by optimism about services trade prospects.

Registration of companies, LLPs hits fresh high in FY24 — Representative image.

New company incorporations fell 4.1% year-on-year in August, after an almost 11% decline in the previous month, show latest corporate affairs ministry data.

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With this, company registrations fell year-on-year in four out of the first five months of the current fiscal year.

An unfavourable base to compare with, after registrations surged to record levels in 2023-14, has played a part in the decline this fiscal year, although the country's medium-to-long term economic growth prospects remain strong, experts said.

As many as 14,696 companies, including foreign firms, were registered in India in August, the lowest so far this fiscal year and compared with 15,320 a year earlier, as per the data. It was also the second straight month when registrations dropped below the 15,000-mark. A total of 77,021 companies were registered in the first five months of fiscal 2025, down nearly 3% from a year earlier.

LLP numbers soar again

Meanwhile, the registration of limited liability partnerships (LLPs) jumped 22.1% in August from a year earlier, maintaining a steady increase month after month barring a one-off drop in May. Between April and August, LLP incorporations jumped almost 26% to 29,318.

The number of registrations had increased 16.3% for companies and 62.7% for LLPs in 2023-24, on the back of strong economic growth prospects and bullish stock markets, on top of measures such as easier incorporation rules. A record 185,314 companies and 58,990 LLPs were incorporated during the fiscal year.

LLP registrations defied the high base to climb by over a fifth since the start of this fiscal year, aided by growing optimism about medium-term services trade prospects, an official said. India's exports of services grew almost 10% on year between April and July, against a 4% rise in those of goods.

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( Originally published on Sep 09, 2024 )