This article is written by Mayank Labh, a student of NALSAR, Hyderabad
According to the latest World Bank report, India stands at the 142th position in terms of ease of doing business globally. No wonder, there have always been clamour and concern for bureaucratic hurdles which prevent the business to run efficiently and smoothly. One such hurdle was the bureaucratic procedure as to the incorporation of a new company. However, a welcome step has been taken by the government of India to make the procedure more simple and user-friendly by introducing an integrated e-form INC-29 for incorporating a company in India.
What are the significant changes
First and foremost is the change that is quite apparent is that instead of separately filing five different e-forms you can file an integrated e-form – INC-29. This form can be used for incorporating a private, public, one-person and producer company, except a company under Section 8 of the Companies Act, 2013. Earlier, even in the case of a single-person company, the range of forms required to be filled included separate applications for obtaining DIN (Directors Identification Number), obtaining a DSC (digital signature certificate), form INC-1 for approval of the name of the company, form INC-7 for registration of the company along with memorandum of association and articles of association, form INC-22 for intimation of registered office and form DIR12 for each director. However, the new integrated form INC-29 allows a maximum of three directors to apply for DIN. This integrated process is expected to reduce the incorporation process by atleast a week.
Secondly, it has done away with the requirement of Verification of specimen signature and the latest photographs of the promoters, first directors of the company by the banker or notary. Now, it is sufficient that the signature and photographs be self-attested by such promoters or first-directors.
What more could be done
The problem is that no timelines are given for processing the application given the diverse details sought in the integrated e-form. Otherwise, it would boil down to same old eight separate applications stuck at the same place. If a time-limits would have been provided to approve or reject the application then such measure could act as the driving force to expedite the process as much as possible.
Secondly, the notification by the government is silent on the corresponding process simplification within the ministry with the changes made in the act. This is important because otherwise the whole purpose of doing this would be defeated.
In conclusion, it can be said that this is a right step taken with a good motive. However, it has to be seen as to how effective it is going to be.
