Ease of Doing Business is India is on A Run

Reserve Unique Name (RUN) is the new Web-Form introduced by The Ministry Of Corporate Affairs to Reserve Unique Name, as another promising step towards promoting work culture in India on its 69^th Republic Day.

In the spree to ease the bureaucratic fallouts in the process of incorporating a company in India, the government in affiliation with the MCA has made the following key changes:

• Incorporation of a Company with a ZERO Fee
• Option to Reserve Unique Name (RUN)
  
• No Digital Signature Requirement prior to Filing E-forms.

Let’s study the initiative in details:

Register Your Company In India with ‘Zero’ Statutory Fee.

In order to promote Startups and budding Entrepreneurs throughout the nation, the government has waived off the government fee on the incorporation of the company with an authorized capital of up to 10 lakh rupees.

This notification has proved to be a blessing as

• It provides a steady kick start for budding entrepreneurs by being easy on their pockets.
• Due to ‘Zero’ fee on SPICe form, eMOA and eAOA , any re submission would not be a hassle. However, stamp duty is still applicable depending on the state of incorporation.
• By introduction of Reserve Unique name (RUN) chances of re submission due to the rejection of name in SPICe form has been ruled out. The companies can seek prior name approval through the web-based form RUN. Moreover, this RUN form is optional.
• This monetary incentive will help boost the number of incorporation of a Private limited company over other forms of registered entities like Limited liability Partnership or Proprietorship etc.

Get Your Name Approval Prior to Incorporation by RUN Web-Form

In order to reduce the time taken to process the incorporation documents, a new Web-form is introduced to speed up the mechanism of obtaining or changing a name even without getting a digital signature.

The following should be kept in mind while using the RUN Web-Form

• You get only One name choice. In case of any rejection, you need to file the same from scratch.
• Any One can file this form by creating a user account with MCA. And fill the following RUN web-form.

• The name so selected should be unique and should not be identical to any company or an LLP or a trademark registered already with the statutory authorities. Hence the applicant is expected to do a proper name search before applying for one. However, don’t rely on the Quick Check System, it does not guarantee name approval even if it shows the name is available as it does not consider the trademarks registered.

• The statutory fee for the form is Rs. 1000/-
• The RUN Form is optional. The applicants have an option to either get their name approved before filling the SPICe form in case they are not very sure of the name applied for, otherwise the applicants can directly proceed to filing of SPICe form, if the name chosen is unique. Moreover, you get 6 name options in SPICe form compared to 1 in the RUN form.

You Don’t Require to Get Director Identification Number (DIN) Separately

 The process of allotment of DIN has been re-engineered by combining it with the Spice form, if the applicant does not have a DIN at the time of its appointment.

A DIN can be applied through the following process:

• DIN using SPICe

DIN can now be directly applied for up to 3 directors at the time of incorporation by providing their PAN or ID proofs.

In case, a person already has a DIN at the time of incorporation of a new company, then the DIN can be manually entered in the SPICe form wherever applicable.

• DIN using DIR3

The new DIR3 is used by existing companies for adding a Director. The same has to be entered with the CIN of the company along with a declaration.

All these measures introduced are an attempt to reduce the overall cost of incorporation of a company in India. The initiative was launched on 26^th January 2018. It is with time we will get to know is it a blessing for the startup world or a blessing in disguise.

(Author Kushaj Gupta has Has an impassioned zeal for penning his untamed thoughts. He likes to explore different realms of the technology-driven business world along with a legal touch. Currently, he is associated with StartUpSection (http://startupsection.com) which is currently dealing in Company Registration in India and other associated activities.)