Company Registrations Fall For Fourth Consecutive Month, LLPs Defy Trend To Grow 22%

New company registrations in India dropped by 4.1% year-on-year in August, following an 11% decline in the previous month, according to the latest data from the Ministry of Corporate Affairs. This marks the fourth year-on-year decline in company incorporations during the first five months of the current fiscal year.

The decline can be partly attributed to an unfavourable comparison base, as registrations had surged to record levels in 2023-24. However, experts remain optimistic about India’s medium-to-long-term economic growth prospects.

In August, 14,696 companies, including foreign firms, were registered, the lowest figure for the current fiscal year, down from 15,320 in the same month last year. This is also the second consecutive month that registrations fell below the 15,000 mark. In total, 77,021 companies were incorporated between April and August, representing a 3% decline from the previous year.

In contrast, the registration of limited liability partnerships (LLPs) surged by 22.1% year-on-year in August, continuing a steady upward trend except for a slight dip in May. Between April and August, LLP incorporations rose by nearly 26% to 29,318.

The previous fiscal year had seen a 16.3% increase in company registrations and a 62.7% jump in LLPs, driven by strong economic growth, a booming stock market, and simplified incorporation rules. Despite the high base, LLP registrations have continued to rise this fiscal year, bolstered by optimism in services trade, with India’s services exports growing nearly 10% from April to July.