The integrated form for company incorporation, INC-29, has provoked much discussion in the media and among legal professionals and entrepreneurs. Expectedly, this has led to the dissemination of some rumours about the INC-29 that need to be clarified. Here is our attempt to clear up all the common misconceptions about the form.
PAN & TAN Are Not Included
The form INC-29 does not give you a PAN or TAN. You have to apply for these separately, just as before. The reason many people have believed that this would be automated with the INC-29 form is that the form asks for ‘Additional Information for applying Permanent Account Number (PAN) and Tax Account Number (TAN)’. However, if you read further, the form clearly states that ‘this facility is available at the e-Biz portal only as per separate procedure prescribed by e-Biz portal’. If you then go to the e-Biz portal, you’ll find the procedure is still to be completed offline. So getting a PAN and TAN will still take 7 working days.
ESIC Is Not Included
INC-29 also asks you to submit details for an Employee State Insurance Corporation (ESIC) application. This is very strange, because ESIC does not even apply to the majority of small companies (only business with over 20 employees need it). Nonetheless, many seem to believe that submission of the form will provide you with ESIC registration. This is not the case at all. To actually get registered, you still need to submit Form 01 to the regional office of ESIC. It takes 5 to 9 days to receive the code number.
Charges Are Lower
Many reports suggest that the new procedure is more expensive, but the cost of the incorporation procedure is, in fact, lower under INC-29. Under INC-29, you must pay Rs. 2000 for filing the form, which includes up to three DINs and the cost of name reservation. And only one DSC is required (cost of Rs. 400 to Rs. 2650). If you don’t opt for INC-29, you must pay Rs. 1,000 for INC-1, Rs. 100 per DIN and Rs. 300 each for INC-7 , DIR-12 and INC-22. You also need two DSCs. So the absolute lowest cost of forms and applications for incorporation under INC-29 is Rs. 2400, while with the non-INC-29 approach, it is Rs. 2900.
The new form allows, one, not two, resubmissions for name approval. So in case the name is rejected on the first attempt, the next one must be approved. If it is rejected, you need to start the process all over again. Under the old process, applicants may suggest six names, but the Registrar still often rejects them on multiple occasions. If that is to happen under INC-29, refiling would be common.
Kenneth Saldanha from Vakilsearch.com