The current government at centre has always been framing policies that are pro-startups and the main agenda of the government has been to develop ease of doing business. Keeping in line with this, in an attempt to ease procedures for new as well as existing companies, the Ministry of Corporate Affairs (MCA) has introduced a slew of changes to the procedures for the incorporation of a company.
The Ministry of Corporate Affairs (MCA) has announced that there will be no fees for incorporation of a company for Simplified Proforma for Incorporating Company Electronically (SPICe) forms, e-Memorandum of Association (e-MoA) and e-Articles of Association (e-AoA).
The MCA has further simplified the name reservation process by introducing Reserve Unique Name (RUN) Form. Earlier, company name could be reserved either in advance through the Name Reservation — INC-1 form or directly through the incorporation application (SPICE Form). Form INC-1 has now been replaced by RUN Form.
The procedure to be followed for this will be quite simple and application for reservation will be done through RUN – a web-based form, where only one name choice can be provided at a time. RUN web-form does not require any prior DIN or DSC, thus making the process extremely quick and easy. MCA Fees for name reservation using RUN web-form is Rs 1,000 per form submission – irrespective of the name being approved or not. Hence, proposed companies have the option to apply for the name reservation directly by themselves by submitting the simple RUN web-form and they would be intimated by the MCA on the approval through email.
Directors of a new company can now apply for DIN only through the SPICE Forms. Details of such directors have to be filled in the SPICE Forms along with their proof of identity and address. Existing companies can use Form DIR-3 for adding a new director. The new DIR-3 Form has the provision to furnish the CIN of the company for which the director is being appointed and a declaration that the DIN is being obtained for adding the person as a director to the mentioned company.
These reforms come amid the continued efforts of the Indian government towards enhancing ease of doing business. The government’s efforts seem to have fructified since India recently jumped over 30 positions in the World Bank’s ease of doing business rankings report.