New Delhi, Dec 3 : The unique legal status of Sikkim in corporate affairs was recently highlighted in the Rajya Sabha, where the Union government categorically stated that the Companies Act, 2013, does not extend to the state.
The clarification was provided by Minister of State for Corporate Affairs Harsh Malhotra in response to an unstarred question raised by Sikkim’s Rajya Sabha MP, D.T. Lepcha.
The MP’s Concerns: Stakeholder Challenges
MP D.T. Lepcha questioned the Ministry about the persistent difficulties faced by Sikkim-based corporate stakeholders, including start-ups, MSMEs, and other entities. He specifically sought information on the challenges related to:
Company registration.
Filing statutory returns.
Compliance procedures under the MCA21 portal.
Furthermore, he pointed to operational obstacles like poor digital connectivity and the absence of dedicated facilitation centres in Sikkim, asking if the Centre planned to establish such support or grant special exemptions.
Centre’s Reply: No Jurisdiction
In his written reply, MoS Malhotra gave a concise response, stating that because the Companies Act, 2013, is “not applicable” to Sikkim, the concerns and supplementary questions raised by the MP—which pertain to compliance, facilitation, and exemptions under the central Act—”do not arise.”
This parliamentary statement reaffirms the Ministry of Corporate Affairs’ position that the regulatory challenges faced by businesses in Sikkim fall outside the purview of the central Act and the MCA21 system.
Companies Act, 2013 Does Not Apply in Sikkim
The Companies Act, 2013, which controls company rules across India, is not applicable in the State of Sikkim at present.
Why It Does Not Apply
This is because Sikkim has a special legal status under Article 371F of the Indian Constitution, which was granted when the state joined the Union of India in 1975.
Which Law Applies in Sikkim
Companies in Sikkim are still governed by the Registration of Companies Act (Sikkim), 1961, which was in force before the merger.
How Central Laws Are Applied to Sikkim
As per Article 371F ( N ), any central law can be enforced in Sikkim only after the President of India issues an official notification. Since no such notification has been issued for the Companies Act, 2013, it does not apply to Sikkim.
What This Means
Because the Companies Act, 2013, is not in force in Sikkim:
Company registration and compliance are handled under the old Sikkim law.
Matters related to the MCA21 portal and central corporate filings do not apply to Sikkim companies.
Concerns raised by local stakeholders on these issues fall outside the authority of the Ministry of Corporate Affairs.
