Yes, it is true that you can now form a company in India within two working days and that too if already you are having Digital Signatures (as these takes 1-2 working days time to form) with you. This is the another step of the Indian Government to make its Make In India Campaign a huge success and to score out its position in the world bank ranking of ease of doing business in India.
The introduction of INC 29 Form is not only a combination of five forms into one form but also a step which eases out the formation of company in India. This form includes DIN allotment to Directors, name reservation of company, Incorporation, Pan and Tan application.
The government said that with this form entrepreneurs can incorporate a company within 48 hours and the claim is 60-70% correct as far as our experience counts and as if you are as an entrepreneur/startup looking to incorporate a company then this news would be more viable for you but the harsh reality is something different.
There is no doubt that our government has done a far better thing to shorten the company incorporation process. But what happen if some things are left by the Government while making this form and what should government do in order to make India come in top 50 countries in order of ease of doing business.
Requirement of One DIN
Here, government is saying that all the forms are abolished and in INC 29 one can file the DIN upto a maximum of three but when we file the INC 29 the form says that the DSC of one director who signed the form should be registered with MCA and without DIN no. that can’t be possible.
So in order to get the things done we have to file One DIR- 3 form of Director along with INC 29 form.
Only Single Name Allowed
Prior to INC 29, the name is filed through INC 1 form in which 6 choices are given and out of those 6, one name got approved by the ROC. And, additionally in these 6 choices form, there are 40% chances of rejections of form.
And in INC 29 form, only one name option is allowed which is very critical thing as one can’t decide a single name according to the ROC mind stability and as experienced ROC has the arbitrary powers to reject the names by saying that the name is generic, not understandable or many more.
Single Resubmission Allowed
Although expedition has been done from the government side but you need to pay for that also, government has fixed the charge of INR 2000 for filing INC 29 and if any resubmission is come and after filing is disapproved (most of the time it is rejected because of name) then you need to pay the whole fees including MOA and AOA and stamp duty fees again.
Do not know where are you stuck
As compare to the previous process, one can know the process where he is stuck like in Name approval or in MOA or AOA or in registered office but in INC 29, you can’t get to know where are you stuck and there is no tracking system been introduced from the government side so that one should get to know the original stucking area.
Giving combinations of different things are easy, but giving that combination with simplification for use is really difficult.
And that’s why this question is to think whether INC 29 combination has solved the problem to the level that what should it to be, and what are the areas where the government should take care of to make this ease a really ease.
Removal of Minimum Paid up capital requirement
Like in LLP, as there is no minimum paid up capital requirement, there should be abolishment of INR 1 lakh capital requirement in Private limited companies which should create an awareness of doing business amongst entrepreneurs under a legal system.
Abolishment of Unnecessary certificates
Although government has decided to abolish the requirement of taking of certificate of commencement of business but whether taking this certificate does make any sense and due to this filing for different forms makes trouble to entrepreneurs.
Increasing the scope of Name Reservation
Most of the delays happen in the incorporation process is due to delay in name approval given by the ROC. Although many times the name given is correct as per rules and regulations, available in name search but the ROC rejects by giving illogical reasoning, in this case the power should be shifted and the rules and regulations should be merged in a company name availability search or any other way out should be find out in which there is minimum manual interference is there.
All Registrations with one Form
Although company incorporation can be done through one form but after getting the company registration one should wait for weeks and weeks for different registrations like 15 days for pan card to come after that 8-10 days for IEC and service tax, 7-10 days for shops and establishment act and many more if required), these registrations should be merged with company incorporation itself as all the documents is taken by the government during incorporation process why they are demanding again and again for different registrations.
Introduction of new things are welcomed every time if they are for benefit and INC 29 is the one out of those but if the flaws from it are also removed and some of the points are also catered by the government then the ease of doing business would make a sense for Make in India.