‘Companies Act 2013 not applicable in Sikkim’

GANGTOK,: The Companies Act 2013 is not applicable in the State of Sikkim. This was the written reply given to the Parliament by Corporate Affairs ministry MoS Harsh Malhotra on Tuesday.

“The Companies Act 2013 is not applicable in the State of Sikkim,” stated the MoS in Rajya Sabha. He was replying to a question submitted by Rajya Sabha MP (Sikkim) DT Lepcha.

Lepcha has asked on whether the Union government has taken note of the difficulties being reported in the registration of companies, and other issues in Sikkim. He was also enquiring whether the ministry plans to assist stakeholders, especially startups, MSMEs, and cooperative entities.

Since Companies Act 2013 is not applicable in Sikkim, the supplementary questions does not arise, it was replied.

Meanwhile, socio-political activist Passang Gyali Sherpa stated that the MoS’s clarification means that the Ministry of Corporate Affairs cannot extend any support, exemption, or facilitation to companies, start-ups, MSMEs, or cooperatives in Sikkim.

“This makes it unmistakably clear that the responsibility now lies entirely with the Government of Sikkim to resolve the long-standing uncertainty surrounding the Registration of Companies Act, 1961. The State Government must immediately clarify its position on the Act and release the committee report that has remained hidden from public scrutiny,” said Passang.

At the same time, this moment presents a strategic opportunity for the State government to initiate serious negotiations with the Central government, using the 1961 Act as the foundation to derive maximum benefits for Sikkim and its economic ecosystem, suggested Passang.

“By doing so, the State can secure a regulatory framework that promotes local industry, safeguards old law protected under Article 371F, and builds an investment-friendly environment for future growth.”

The socio-political activist stated that in addition to transparency, the State must urgently create a dedicated facilitation mechanism to support local companies, start-ups, small businesses, and cooperative bodies operating in Sikkim.

“There is a pressing need for a clear, time-bound roadmap on corporate regulation, along with temporary protective measures to safeguard local enterprises during this period of legal ambiguity. A multi-stakeholder advisory panel and the digitalisation of all processes under the 1961 Act are also essential for modern, accountable governance. Sikkim can no longer function in a regulatory vacuum. The people now expect decisive leadership and immediate corrective action from the State Government,” said Passang.