Why Not To Use Reserve Unique Name (RUN) Web Form

The Government of India along with the Ministry of Corporate Affairs made some strategic efforts to promote the startup culture in the year 2018.

Last year, The Ministry of Corporate Affairs focused on the agenda of incorporating a company in India in just 1 day. Now the campaign of ease of doing business in India has levelled up its bar by

• Waiving off the Incorporation fee
• Introducing a new Web Form for Name Approvals
• Streamlining DSC and DIN

For More Read : Ease of Doing Business In India Is On A RUN.

Has the government really made the incorporation of a company in India cheap by reducing the statutory fee to ‘Zero’ for SPICe form and eMOA and eAOA or fabricated the process of collecting proceeds by creating a second window of Rs. 1000/- for name approvals through RUN web form?

Let’s study the cost breakdown under the two alternatives available for incorporation of a company in India.

If we Register a Company through RUN

Every applicant needs to file the web-based Reserve Unique Name form before filing the SPICe form for incorporation.

The RUN form gives an applicant only a single chance to get a suitable unique name approved. In case of rejection of the name due to any similarity of name with a registered company, an LLP or a trademark or due to non-adherence of the Companies (incorporation) Rules,2014; there are no second chances available.

The applicant will have to re-file another RUN form with a fresh fee of Rs.1000/-.

Let’s study the cost breakdown for this alternative:

* In case of re submission another Rs.1000/- would be levied.

** Different states have different stamp duties applicable. Which are not exempted.

Since it is optional for the applicants to either opt for the RUN form or not, let us evaluate the other option.

If we Register a Company through SPICe

An applicant can directly proceed to file this E-form. You get one chance of entering the proposed name for registration, which is similar to that of the provision in RUN.

Moreover, in case of rejection due to non-approval of the name, the applicant will get a second chance of refilling the same SPICe form without any further charges.

So, in short, you get two chances of filing the same form without any extra charge of paying Rs. 1000/- both the times.

Let’s study the cost breakdown for this alternative:

In case of failure to get the name approved in the second go, you can file the SPICe form again from scratch. This will any day prove to be cheaper than opting for the first option.

Cost Comparison of RUN vs. SPICe

 Let us evaluate the number of chances you get in SPICe form over the RUN web form when you pay about the same price.

* This Rs.600 is the cost of SPICe form which will be filed after the name approval through RUN.

This comparison makes the ambiguity of opting for RUN web form over SPICe form, more clear. RUN has indeed proved to be a blessing in disguise with its user-friendly form which will make the applicant pay off more.

(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.)