The Ministry of Corporate Affairs (MCA), has made a number of changes in the procedures related to the incorporation of a company. With the new rules, the government wants to make the process of incorporation easier, convenient and digital.
Three new initiatives were taken by the MCA on the occasion of Republic Day 2018 regarding this. Have a look at the comparison of current and revised processes for company incorporation:
1. Zero incorporation fees
MCA has announced that no fees will be charged for incorporation for Simplified Proforma for Incorporating Company Electronically (SPICe) forms, e-Articles of Association (e-AoA) and e-Memorandum of Association (e-MoA). Earlier the charges for registration to get the certificate of incorporation was around Rs. 15000 in Maharashtra. However, the company will have to pay the necessary Stamp Duty. This new rule will definitely encourage new startups to register their businesses quickly than before.
2. A new Reserve Unique Name (RUN) form
Another thing that has been done to simplify the registration process is the introduction of a new form which is called Reserve Unique Name. Earlier, it was required to fill the Name Reservation (INC-1) form or by the incorporation application (SPICe Form) to reserve a name in advance. The RUN form has now replaced the INC-1 form. Other benefits of RUN include:
- RUN form has only one option for the name of a company, INC-1 had six options for the company’s name.
- RUN form doesn’t require any Digital Signature Certificate (DSC) or a Director Identification Number (DIN)
- The approved name is valid for a period of 20 days for a new company and 60 days for an existing company. Earlier, it was valid for 60 days for both old and new companies.
- The fees charges for submitting RUN form is Rs. 1000 irrespective of the name being approved or not. Earlier, if the names were not approved, one chance was given without any charges to change the name.
3. Director Identification Number (DIN)
According to the new set of rules, Directors of a new company has to fill SPICE Forms and give their proofs of address and identity with SPICE forms. For old companies, the new DIR-3 form has to be filled for adding a new director.
The Indian government is making a lot of changes and introducing new programmes to make the process of doing and registering new business by not only making it easier but a lot more secure with digitalisation.
