Ease Of Doing Business – Introduction of RUN Services, ‘Zero Fee’ Incorporation and other recent changes in Company incorporation procedures.

The Ministry of Corporate Affairs (MCA) brought about a transformational change in the company name reservation and incorporation processes ever since it has undertaken the initiative of Government Process Re-engineering (GPR) and setting up the Central Registration Center (CRC) for processing of Company Name Availability and Incorporation aspects. The project to transform the processing of Company Incorporation e-Forms was undertaken with one clear objective – Applications for Name reservation and Incorporation of a company should be processed and completed within 24 hours (One working Day) in line with Global best corporate practices.

RUN Services – Reserve Unique Name

Recently the Ministry of Corporate Affairs took up a bold initiative by introducing the RUN (Reserve Unique Name) service. Effective from 26th January, 2018. It is a simple and easy to use web service for reserving a name for a new company or for change of name for any existing company. Let’s check out the salient features of this newly introduced service:

  • It is introduced in form of an Online Utility on the MCA portal.
  • As compared to the previous procedure of Filing INC-1 e-Form, no prior DINs or DSCs are required for making RUN application.
  • The name applied for will either be approved or rejected and no re submission is allowed. A fresh payment of Rs. 1000 has to be made for every application submitted using the RUN service.
  • Filing fees remains the same as compared to previous procedure i.e. Rs. 1000/- but as there are no chances for Re submission, there remains a probability of frequent name rejections.
  • An approved name is valid for a period of

(i) 20 days from the date of approval (in case name is being reserved for a new company); or

(ii) 60 days from the date of approval (in case of change of name of an existing company).

  • A comment section is introduces where the applicant has to enter the objects of the proposed company and any other relevant comments in support of the proposed name.
  • Name applications will be processed by Central Registration Center (CRC) under Non- STP mode. The name applied for will be subjected to a comprehensive check by the Central Registration (CRC) and thereafter approval or rejection, as the case may be, shall be communicated by e-mail to the applicant.
  • When a proposed name is approved or rejected, an email communication containing confirmation of approval or rejection (as the case may be) with related documents, if any, is sent to the email id of the applicant.
  • This is a post-login service and existing users would need to login into their account using their credentials, and new users are required to create a login account first before using the service on MCA portal. The same user login ID which was used for reserving the name has to be used for submitting and uploading SPICe or any other Incorporation forms.

Incorporation with ‘Zero Fees’

Along with the introduction of RUN services, the Ministry has introduced Companies (Registration Offices and Fees) Amendment Rules, 2018, wherein it has eliminated the fees charged by it at various stages of Incorporation. Although, the Stamp Duty being still levied, this is a huge relief as they have implemented the process of Speedy, Smooth, Simple incorporation with Zero fee for incorporation of all companies with authorized capital up to Rs. 10 lakh. The following table represents the revamped fee-structure implemented by the Ministry:

TABLE OF FEES TO BE PAID TO THE REGISTRAR

(pursuant to rule 12 of the Companies

(Registration of Offices and Fees) Rules, 2014)

(I) In respect of a company having a share capital : Other than OPCs and Small Companies (in rupees) OPC and Small Companies (in rupees)
1. (a) For registration of OPC and small companies whose nominal share capital is less than or equal to Rs.10,00,000.   
(b) For registration of OPC and small companies whose nominal share capital exceed Rs. 10,00,000, , the fee of Rs. 2000 with the following additional fees regulated according to the amount of nominal capital: For every Rs.10,000 of nominal share capital or part of Rs.10,000 after the first Rs.10,00,000 and up to Rs. 50,00,000. 200
2. (a) For registration of a company (other than OPC and small companies) whose nominal share capital is less than or equal to Rs. 10,00,000 at the time of incorporation.
(b) For registration of a company (other than OPC and small companies) whose nominal share capital exceed Rs. 10,00,000, the fee of Rs.36,000 with the following additional fees regulated

according to the amount of nominal capital :

(i) for every Rs. 10,000 of nominal share capital or part of Rs 10,000 after the first Rs. 10,00,000 up to Rs. 50,00,000. 300
(ii) for every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 50,00,000 up to Rs. one crore. 100
iii) for every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 1 crore. 75
Provided further that where the additional fees, regulated according to the amount of the nominal capital of a company, exceed a sum of rupees two crore and fifty lakh, the total amount of additional fees payable for the registration of such company shall not, in any case, exceed rupees two crore and fifty lakhs.
3. For filing a notice of any increase in the nominal share capital of a company, the difference between the fees payable on the increased share capital on the date of filing the notice for the registration of a company and the fees payable on existing authorized capital, at the rates prevailing on the date of filing the notice:
(a) For OPC and small companies whose nominal share capital does not exceed Rs. 10,00,000. 2000
(b) For OPC and small companies, for every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 10,00,000 and up to Rs. 50,00,000. 200
Other than OPC and small companies

(c) For increase in nominal capital of a company whose nominal share capital does not exceed Rs. 1,00,000.

5000
(d) For increase in nominal capital of a company whose nominal share capital exceed Rs. 1,00,000, the above fee of Rs. 5,000 with the following additional fees regulated according to the amount of nominal capital :
(i) for every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 1,00,000 up to Rs. 5,00,000. 400
(ii) for every Rs. 10,000 of nominal share capital or part of Rs 10,000 after the first Rs. 5,00,000 up to Rs. 50,00,000. 300
(iii) for every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 50,00,000 up to Rs. one crore. 100
(iv) for every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 1 crore. 75
Provided further that where the additional fees, regulated according to the amount of the nominal capital of a company, exceed a sum of rupees two crore and fifty lakh, the total amount of additional fees payable for the registration of such company shall not, in any case, exceed rupees two crore and fifty lakhs.
4. For registration of any existing company, except such companies as are by this Act exempted from payment of fees in respect of registration under this Act, the same fee is charged for registering a new company.
5. For submitting, filing, registering or recording any document by this Act required or authorized to be submitted, filed, registered or recorded:
(a) in respect of a company having a nominal share capital of less than Rs. 1,00,000. 200
(b) in  respect  of a  company  having  a  nominal  share  capital  of  Rs. 1,00,000 or more but less than Rs. 5,00,000. 300
(c) in respect of a company having a nominal share capital of Rs. 5,00,000 or more but less than Rs. 25,00,000. 400
(d) in respect of a company having a nominal share capital of Rs. 25,00,000 or more but less than Rs. 1 crore or more. 500
(e) in respect of a company having a nominal share capital of Rs. 1 crore or more.

Provided that in case of companies to be incorporated with effect from 26.01.2018 with a nominal capital which does not exceed rupees ten lakhs fee shall not be payable.

600
6. For making a record of or registering any fact by this Act required or authorized to be recorded or registered by the Registrar:
(a) in respect of a company having a nominal share capital of less than Rs. 1,00,000. 200
(b) in respect of a company having a nominal share capital of Rs. 1,00,000 or more but less than Rs.5,00,000. 300
(c)  in  respect  of  a company  having  a  nominal  share  capital  of  Rs. 5,00,000 or more but less than Rs. 25,00,000. 400
(d) in respect of a company having a nominal share capital of Rs. 25,00,000 or more but less than Rs. 1 crore or more. 500
(e) in respect of a company having a nominal share capital of Rs. 1 crore or more. 600
(II) In respect of a company not having a share capital :
7. For registration of a company whose number of members as stated in the articles of association, does not exceed 20. _
8. For registration of a company whose number of members as stated in the articles of association, exceeds 20 but does not exceed 200. 5000
9. For registration of a company whose number of members as stated in the articles of association, exceeds 200 but is not stated to be unlimited, the above fee of Rs.5,000 with an additional Rs. 10 for every member after first 200.
10. For registration of a company in which the number of members is stated in the articles of association to be unlimited. 10000
11. For registration of any increase in the number of members made after the registration of the company, the same fees as would have been payable in respect of such increase, if such increase had been stated in the articles of association at the time of registration :

Provided that no company shall be liable to pay on the whole a greater fee than Rs. 10,000 in respect of its number of members, taking into account the fee paid on the first registration of the company.

12. For registration of any existing company except such companies as are by this Act exempted from payment of fees in respect of registration under this Act, the same fee as is charged for registering a new company.
13. For filing or registering any document by this Act required or authorized to be filed or registered with the Registrar.

Provided that in case of companies to be incorporated with effect from 26.01.2018 whose number of members as stated in the articles of association, does not exceed 20, fee shall not be payable.

200
14. For making a record of or registering any fact by this Act required or authorized to be recorded or registered by the Registrar.] 200

Other amendments

The ministry has also Re-engineered the process of allotment of DIN by allotting it through the combined SPICe form only at the time of an individual’s appointment as Director, in case he/she doesn’t have a DIN. Further in accordance to these recent changes and to make it in parlance with the LLP e-forms due to deprecation of DIR-3, allotment of new DINs for Designated Partners/Partners of LLPs are temporarily suspend issuance from 26th January 2018 till 31st March 2018.

Also, Forms SPICe(INC-32), SPICe MoA(INC-33), SPICe AoA(INC-34), INC-3, INC-12, INC-22, INC-24, DIR-3, DIR-12 and GNL-1 have been revised in order to give effect of the introduction of RUN services in the Incorporation procedures.

Incorporate your Company with Zero Fees

(Author can be reached at support@ebizfiling.com)

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Ishita is a young woman entrepreneur and currently the Operations Director at ebizfiling India Private Limited. In her entire career so far, she has led a team of 50+ professionals like CA, CS, MBAs and retired bankers. Apart from her individual experience on almost every facet of Indian Statutory View Full Profile

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