On the occasion of World Labor Day, Ministry of Corporate Affairs (MCA) introduced a major reform for entrepreneurs in India. Effective May 1st, incorporation of a new business will require only one form to be filled, against 5 earlier.
This new form is known as INC-29, and it replaces earlier tedious process of filling out several forms for incorporating a new company.
The INC-29, a 5-in-1 form for company registration, combines the application for DIN allotment, name reservation, incorporation and even PAN & TAN, while making the process cheaper. As the entire incorporation process is in a single form, correct filing could mean approval in 48 hours, the government claims. If you’re an entrepreneur, you should be impressed. Relative to the old process, it has the potential to save you a lot of time, if properly implemented.
Earlier Form Filling:
1. Applications for obtaining a DIN – DIR - 3
2. Approving the name of the company - INC-1
3. A separate form for registration of the company (With MOA & AOA) – INC - 7
4. Form INC-22 for sharing details about registered office – INC - 22
5. A separate form DIR-12 which should be sent to every director – DIR - 12
Now Form Filling:
All these formalities are now thing of past, as only INC-29 is now sufficient.
INC-29 will provide following services through a single e-form:
- Allotment of Director Identification Number;
- Name of a company; and
- Incorporation of a company.
Advantages and Disadvantages of INC - 29
Advantages of INC – 29
1. Now Company can incorporated within 24 working Hours after filed INC 29 with MCA portal. Separate queue for processing INC-29 has been created at ROC back office.
2. Currently, INC – 29 is only an option for incorporating the company. You can also incorporate the company with old procedure also.
3. If form is rejected then you can apply for refund through Refund Form.
4. You can also apply for Permanent Account Number (PAN) and Tax Deduction Account Number (TAN)
5. If the address for correspondence is not the address of registered office of the company. In this case, the company shall establish its registered office within fifteen days of the approval of this application for Incorporation and shall also intimate such address of registered office within thirty days of the Incorporation via e-form INC-22.
Disadvantages of INC – 29
1. Narrower Name Proposal
The Registrar has so far asked applicants to submit 6 names in order of priority. Even with the luxury of options, company names take 7 working days to be approved. The INC-29 will allow applicants to submit only a single name. So, while applying applicant has to undertake the necessary diligence regarding the name keeping the in mind the guidelines issued by MCA for Name approval. In case the name applied is rejected then you have the option to re-submit it for 1 more time. It remains unclear how this will not lead to more rejections.
2. Single Re-submission
The INC-29 combines forms, but does not eliminate any procedure. It’s just that you must now submit everything at once. This means that, should there be errors, you will get to know of all of them at once. This is a good change, but we should be concerned about the fact that only a single re-submission is allowed before you have to file the entire form and pay the Rs. 2000 again.
3. No Tracking System
Under the non-INC-29 system, you always know which process you’re stuck at. Since through INC-29, you are applying for 3 approvals i.e. Name, DIN and company registration, if any one fails all the others also fails. For example if there are issues in DIN application, then the entire application will be rejected and you have to file afresh.
4. Section 8 Companies not Included
Incorporation of a charitable company under section 8 (Formation of Company with Charitable objects) and company defined under chapter XXI (Unregistered Companies) of the Companies Act, 2013 are not facilitated under this integrated incorporation form.
Download Form INC-29 with instruction Kit.
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