COMPARISION BETWEEN INCORPORATOIN OF COMPANY

COMPARISION BETWEEN INCORPORATOIN OF COMPANY BY NEW AND OLD PROCESS



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, welcome step has been taken by the Narendra Modi government to make the procedure more simple and user-friendly by introducing an integrated e-form INC-29 for incorporating a company in India. ‘EASE OF DOING BUSINESS’.

With the introduction of the INC-29, the Ministry of Corporate Affairs (MCA) has begun to make good on its promise to improve India’s ranking on the World Bank’s Ease of Starting a Business Index to inside the top 50 from the current 158. 

The new concept of FAST TRACK INCORPORATION was given effect by the MCA in the form of the new form INC 29. The form INC 29 facilitates the incorporation of the company in a single form (i.e) as soon as form INC 29 is filed with the ROC the company will come into existence legally. The concept behind this new form is just to encourage the new entrepreneurs to begin a company without any hindrance while incorporating the company legally with the ROC. The introduction of this form has reduced the complexity which was present in the previous method of incorporating a new company and further reduces the cost when compared to the previous method.

The corporate affairs ministry will from May 1, 2015 have an integrated company incorporation form to make compliance and reporting easier and convenient for Corporate.

Particular
Integrated Incorporation Process
Normal Incorporation Process
Both the options are available with Companies for Incorporation.
Purposes
5-in-1 form
N. A.
No. of Form Filing
1 (ONE)
5 (FIVE)
Steps of Incorporation
Single Step of Incorporation
Three Step Incorporation
Form Filing Requirement
Only one Form INC-29.
DIR-3- Application for DIN
INC-1 – Application for Name Approval
INC-7 – Incorporation of Company
DIR-12 – Appointment of First Directors
INC-22 – Situation of Registered Office
Digital Signature
Only One DSC required.
DSC of both Subscribers Required.
Incorporation of Section 8
Company
Section 8 Company can’t incorporate by this process.
Section 8 Company can incorporate by this process.
Din Allotment
Maximum 3 Person can apply DIN through this process.
Separate DIR-3 will be file for each person.
Verification of specimen signature and the latest photographs in INC-10
No need Verification of specimen signature and the latest photographs of the promoters, first directors of the company by the banker or notary.

it is sufficient that the signature and photographs be self-attested by such promoters or first-directors

Need of Verification of specimen signature and the latest photographs of the promoters, first directors of the company by the banker or notary
Narrower Name Proposal
Person can give only ONE Name for Approval. 
Person has option to give alternate SIX Names.
Name Keeping
While applying name applicant has to undertake necessary diligence regarding the name keeping, considering the guidelines issued by MCA for Name approval.

Drawback: Be sure for the proposed name, only one name can be given this the major drawback of this e-form.
Person has option to give maximum SIX names. Therefore, comparatively less diligence requires.
Time frame
There approval of DIN, Name and Incorporation will be altogether.
Generally it will take 4-5 days.
First DIN form will approve generally it takes 1 day. Second Name will Approve, generally it takes 7-10 days. Third Incorporation will Approve, generally it takes 7- 10 days. Generally Incorporation of Company takes 20-25 days.

         ·            Apply for DIN in DIR 3: It is a STP form DIN is generated in e-form Challan.
         ·            INC 1 takes 7-10 days for approval, maximum re-submission cases are there.
         ·            INC 7 takes 10-15 days for approval.
         ·            DIR 12 takes 1-2 days to get approved.
         ·            INC 22 gets approved in 2-3 days.
In total 21-30 days.

Plus whenever any of the above form comes in re-submission a separate costing to visit concerned ROC and loss of time.

If we calculate all of above incorporation of a Company under process can consume a month or more.

Attachment of ID Proof
In case of Director/Shareholders have DIN, then no need to attach separate Address Proof/ ID Proof.
Even Director/Shareholders have DIN, then also need to attach separate Address Proof/ ID Proof.
Approval Process
The form will be assisted by a separate team at ROC back office. Therefore, approval may be quick
The approval of e-form will take comparatively more time
Professional Certification
INC-29 requires Professional Certification.
No need of professional Certification in e-form INC-7.
Resubmission
Only single resubmission is allowed
Two resubmission is allowed.
Refund of MONEY
In case of rejection of form, company can apply for refund of money by refund form.
No refund allowed.
No Tracking System
Here applying for 3 approvals, If any one fails all other also fails Exp. If there is issue in DIN application, then the entire application will reject.
Here applying in separate-2 forms. If one fails then other are safe.
Consolidation of Fees
Fee Structure will be like This:
INC-29 – 300/-
Fee Structure will be like This:
1.      DIN- 500/-
2.      INC-7- 300/-
3.      INC-22- 300/-
4.      DIR-12- 300/-
Stamp Duty on MOA
If paid up share Capital 100,000/-. Then Rs. 300/-
Same as INC-29
Stamp Duty on AOA
0.15% of Authorized Share Capital of the Company
Same as INC
PAN & TAN
Both can Apply along with incorporation.
Same as INC
Attachment
All most same in both processes.
All most same in both processes.



Comments

  1. Thank you sir...its really very nice article

    ReplyDelete
  2. Dear Mr. Goyal,

    I just went through the detailed differences outlined by you between the two ways of incorporating a company; i needed to know about "Refund of Fees" aspect. Where is it mentioned that in case of rejection of E-form INC-29; fees ought to be refunded on filing of refund form? Have you been successful in getting refund?

    ReplyDelete

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