Recently, there has been a series of amendments made to the Companies Act, 2013. The sole objective of these changes was to encourage startups to formally register their startups with ease. With due consideration to the changes the new rules, we will look into Top 3 things that new ventures should be aware of before incorporating.
1. Incorporation of Company at Zero Fees
- 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 company will have to pay only the necessary Stamp Duty, which is applicable at a rate depending on the state of incorporation.
2. Reserve Unique Name (RUN) Form
- The Ministry has also introduced Reserve Unique Name (RUN) forms to simplify the name reservation process of a company.
- The rules earlier required a company to reserve a name either in advance through the Name Reservation — INC-1 form or directly through the incorporation application (SPICe Form).
- Now, the RUN form has replaced the INC-1 form.
- Other features include:
- RUN form gives the option for only one name for the company, unlike INC-1 which had a provision of six options for the company’s name.
- RUN form doesn’t require any Director Identification Number (DIN) or a Digital Signature Certificate (DSC)
- The fees for RUN form is $15.7 (INR 1000), irrespective of whether the name is approved or not
- The approved name is valid for up to 20 days and 60 days from the date of approval for a new company and an existing company, respectively.
- The proposed companies can apply for the reservation of name using the RUN form and they will be intimated of the approval by the MCA through email. However, it has been suggested that RUN form be used when there is an ambiguity about the name because of its similarity to existing companies or Limited Liability Partnerships (LLPs).
- If the name is unique, a company can apply for the name directly with the SPICe form. This would save time and money for the applying company.
3. Director Identification Number (DIN)
- The new rules of MCA specify that a new company can apply for DIN only through SPICe forms.
- For an existing company, MCA specifies the use of form DIR-3 to add a new director. This form has a provision for furnishing the CIN of the company and a declaration of the addition of a director.
In conclusion, these reform by the Indian government towards enhancing ease of doing business is a huge step. On the same note, in case you are planning to start up your business in 2018, with the help sector expertise that brings to the table, I am sure Wazzeer can deliver this service seamlessly from any remote location. Do let us know if you need a hand -> GET STARTED