According to the Companies Amendment Act (2015), the MCA (Ministry of Corporate Affairs) has given an exception to private companies. In this article, you will understand the important amendments for the company incorporation process in India.
Amendments to the Company Incorporation Process
Are you facing trouble with setting up your company? Below, you will find a clear description of the amendments to the company incorporation process.
It has been great to see the Ministry taking steps to make business easier for companies.
- Companies Amendment Act (2015): According to this Act, the MCA (Ministry of Corporate Affairs) has given an exception to private companies. Whereas the necessity for the least paid-up capital was moreover removed.
- Companies Act (2013), Vide Notification Date (22/1/2016): According to this Act, under Section 396 MCA established CRC (Central Registration Centre) in an initiative of GPR (Government Process Re-engineering for giving rapid incorporation associated services in line with global best practices.
- Central Process Re-engineering was acknowledged with one motive to rephrase the applications for Incorporation of a company and name reservation must be finished within D or D+1 days (where D implies to Date of Payment Confirmation). At first, the CRC prepared applications for name availability via e-form INC-1. After that, CRC took the initiative to practice e-forms for the incorporation of companies.
- SPICe: This e-Form was launched as a replacement for Inc-29. Simplified Proforma for Incorporating Companies Electronically (SPICe) has been introduced by MCA. In advance, the Ministry of Corporate Affairs has joined the MCA21 System with the Central Board of Direct Tax (CBDT) for issuing Permanent Account Numbers (PAN) and Tax Deduction and Collection Account Numbers (TAN )to a company incorporated using (SPICe).
- Stakeholders must consent to applications for pan/ tan, during the time of submission for incorporation of application via SPICe. PAN/TAN to be assigned by the income tax department in the process to be attached to the certificate of incorporation of the company. Stakeholders can apply for Direct Identification Number (DIN) via SPICe with the limitation of three directors. This results in a reduction of time and process which was taken to start a business in the country.
- After the introduction of SPICe in replacement of Inc.1. MCA took the initiative to introduce a new simplified web-based service called R.U.N. R.U.N, which is also known as resolve unique name helps in reserving a name. With this help, the usage of the digital signature certificates (DSC) is removed while name reservation. This addition has helped to do the business at ease.
- The Companies Incorporation Rules, 2014 – Ministry vide notified G.S.R. no. 180 (E) marked on 6/3/2019 made some amendments in Rule 38(2). According to this, MCA should not charge any fees for all the incorporations with authorized capital up to RS 15, 00,000.
- Declaration must be provided in SPICe e-Form itself, in replacement of Affidavit which was before an extension.
- Limited liability partnership Second Amendment rules, 2018. According to this act, the Ministry of Corporate Affairs has made some changes to LLP rules 2009 which was notified on 18 nine 2018, and started effective from 2/10 2018.
- The changes made to initiate RUN/ LLP form in replace of LLP form 1 for name reservation. And LLP form 2 was replaced with Fillip for incorporation. Before LLP incorporation where made in respective of ROCS. The process is centralized to have its section with companies and as a section to start a business in India.
- The Ministry changed the Companies Incorporation Rules in 2014 and added Rule 38A to ease the combination of the MCA21 system with the registration of GST, EPFO, and ESIC. During the time of incorporation of companies in e-Form (SPICe) . Ministry vide notified G.S.R. no. 275 (E) dated on 29/3/2019.
- The company’s incorporation 5th amendment rules, 2019 – MCA made some changes in name availability rules. These changes in rules made a clear instructions to avoid vagueness in name reservation. Hence, the name rejection rate and time taken for the approval process is reduced. This results in greater transparency, eradication of discretion, uniformity, and speed.
- MCA made some changes in the incorporation regulation on section 8 companies vide notified no. 411 (E) marked on 7/6/2019, according to which the application for the incorporation of the preferred companies and license must be completed in a single form in SPICe.
- Prior, the license was created through e-form INC-12 from individual ROCs/RDs which is now combined with SPICe and centralized. This procedure helped the incorporation of section 8 Companies in the reduction of Timeline.
MCA collaborated with the labour department of Delhi to make some changes in the procedure for applying for company incorporation through SPICe. This change is made so that ERN (Establishment Registration Number) and shop for labour department in Delhi can also be provided via the SPICe form only.
