How to Incorporate a company – Recently proposed changes by The Ministry of Corporate Affairs

January 24, 2018

This article is written by team LegalWiz.in. The article discusses how to incorporate company with proposed changes in India.

The Ministry governing the operations and administration of companies and LLPs in India (Ministry of Corporate Affairs) is proactively participating to facilitate the changes in procedure of online registration of Private Limited Company. The changes are proposed to be deployed from 26th of January, 2018, whereas in order to facilitate such changes, the ministry has deprived the e-form for application of Name Reservation. Under the current status and proposed changes, the procedure of Pvt Ltd Company registration will differ from that of present.

What are the proposed changes?

The Ministry of Corporate Affairs has currently shown its participation and interest in designing the Front Office Services. The Ministry has proposed changes that will lead to substantial change in the procedure of incorporation of companies. In order to facilitate said changes, MCA currently suspended certain e-forms that were essential for completion of present incorporation procedure.

Ministry has proposed to change the current Form for Name Approval from e-form to web form. In order to facilitate the changes, the e-form INC – 1 is suspended by MCA for a period ending on 25th of January. The web-form is proposed to be on board since 26.01.2018.

Further, the process to procure DIN (Director Identification Number) by the Directors of the company will be changed from 26.01.2018. The proposed Director or individual will not be allowed to make an application for procurement himself/herself. The company concerned only will be filing the application to procure DIN of the individual.

What are the effects of proposed changes?

Due to abovementioned changes, the procedures are also changed where INC – 1 is currently suspended and therefore promoters are required to file an application of name approval along with SPICe forms only. Hereby, the stated form allows only one name to be filed for approval by the applicant. Hence, the task for promoters has become tedious for this limited period. The re-submission or rejection of the form can lead to preparation of documents from scratch as of now.

SPICe forms for application of incorporation are also depreciated for fresh filing since midnight of 18th January, 2018. New forms in this regards are proposed to be implemented since 26th of Jan, therefore the stakeholders cannot make any application for incorporation of the companies. The promoters can temporarily make application for allotment of the DIN only. The name approval and incorporation can only be proceeded with after implementation after deployment of new forms.

With respect to application of DIN and proposed changes, currently used e-form DIR – 3 will be suspended since 26th of January, 2018. Resulting to which, unlike present scenario, the individual himself cannot make an application for allotment of DIN. The company in which individual is proposed to be appointed shall will be required to make application while filing form of appointment.

In case of companies to be formed, application of DIN for the first directors will require to be made in the e-form for application incorporation i.e. SPICe forms. Further, the SPICe forms will allow application of maximum 3 new DINs. Producer companies require appointment of minimum 5 first directors, hence, proposal is made that form DIR – 3 will be modified for this purpose only.

When the company needs to appoint another new director, who does not hold DIN on date; the company is required to make an application to allot DIN along with filing the form of director’s appointment.

The case is different in case of Limited Liability Partnership as no declaration is made for the procedure of DIN allotment to the designated partner of the LLP. The Ministry has declared to depreciate form DIR – 3 from 26th January to 31st of March, when the issuance of DIN will be suspended. Hence, until the Ministry declares any further process, the application and allotment of DIN will not be possible in case of Limited Liability Partnerships.

The incorporation of the Limited Liability Partnership will get effected due to this depreciation of DIN issuance. The promoters and partners may be required to halt the planning to commence business as Limited Liability Partnership. We expect declaration of specific resolution of the same to start the procedure of LLP incorporation.

What will be the procedure of incorporation?

Hereby we are discussing the procedure of private limited company registration for two different situations:

Up to 26th January 2018

Due to depreciation of forms relating to incorporation, the promoters will not be able to make incorporate a Private Limited Company for a temporary period. Till then application for procurement of DSC and application for Allotment of DIN. It would be recommended to procure the DIN on prioritynoting  the form for DIN will not be available on end of this period to avoid hassle due to change of forms.

After 26th January 2018

ON 26th January 2018, Ministry will deploy new web form for Name Reservation as well as incorporation. Following will be the steps for Pvt Ltd company registration.

  1. Procurement of Digital Signature Certificate

Foremost step will be to procure Digital Signature Certificate that is issued by the certifying authority to the applicant. The Digital Signature Certificates (DSCs) are required to be procured by proposed first directors and the subscribers to Memorandum of Association (MoA).

  1. Application for Name Approval

The promoters will be able to make a separate application to reserve the names for a proposed company. Application can be made by providing maximum 6 names in preference as made in earlier forms. The ministry proposes to capture minimal information that is essential for the reservation of the name. However, the proper information can only be known after deployment of form by Ministry.

  1. Drafting of documents

At present, the promoters are required to make an application directly for certificate of incorporation. Hence, requisite documents are first prepared to accompany the application for successful registration of private limited company.

  1. Filing of SPICe Forms

The next step is to make an application of incorporation of the company by submission of prescribed documents. This step will include two processes, one being application for allotment of DIN and other being application to incorporate a company. The SPICe forms will be modified accordingly to subsume both applications. DIN allotment process is included in these forms, however, the ceiling limit of 3 DIN in one form is provided in the forms.

The application shall be accompanied with following documents:

In addition to these documents, e-MoA and e-AoA will be filed on by payment of requisite fees and stamp duty as applicable for filing of such form. If the application filed is found appropriate to the satisfaction of the Registrar, he may issue the Certificate of Incorporation under his signature and seal with the date of incorporation and PAN of the company. The DIN will also be issued to the proposed directors. The company will be in existence since the date of incorporation mentioned in the Certificate of Incorporation.


The procedure of company incorporation are proposed to made simplified and assuring to get accurate information by provision of DIN application by companies. Under SPICe forms, the DIN allotment will be approval based instead of Straight Through Processing (STP) of applications. Hence, caution in that regards is required on part of applicants. Further, Incorporation procedure of LLP will be affected due to depreciation of DIN application till end of March. Make sure to comply with all provisions under reformed provisions by hiring professionals LegalWiz.in as your assistant for private limited company online registration in India. Incorporation of Private Limited Companies in India is made simple for you by our professionals that assure you hassle-free and transparent procedure with nominal prices.

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LegalWiz.in Private Limited is a premier online service provider engaged in serving to pan India basis for incorporation of companies and matters related thereto. You may directly reach the author and the team, on call at 89806 85509 or on e-mail at support@legalwiz.in. Read about other services at http://www.legalwiz.in.

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