As we have highlighted previously, the Government is seriously looking at ways to smoothen the ease of doing business. In its latest endeavor towards this, the Government has come up with a notification which seriously reduces the paperwork required for forming new business and have also clarified some of the grey areas in the rules. In this article we shall try to observe the major highlights of the notification and analyze its implication on the formation of the company.

 

1.INC 10 Declaration is no more required
Previously the subscribers needed to make a declaration self attesting his/her signature and the photograph. However, as per the latest notification the declaration is no more needed. We can file the incorporation form without it. This is a welcome change as most did not find any logic of self-attesting your own signature and photograph especially in a closely held start up!

2. Subscriber sheet can now be made in typed mode

Gone are the days where the subscribers and the witness had to sit and fill their details in their own handwriting on the Subscriber Sheet. As per the latest notification the subscriber sheet can be filled in typed form. All that is required is the signature from the parties and it shall be accepted by the Ministry.

3.Identity Proof and the Residential Proof is not required to be attached

Till now there was a mandatory requirement of attaching the ID Proof (Voter ID/D. Licence/ Adhar/ Passport) and Residential Proof (Mobile or Telephone Bill/ Electricity Bill/ Bank Statement) with the incorporation form. However, now the rules have been amended. If the promoters give a declaration that their DIN is updated then it is not necessary to attach the ID and Residential Proof with the Incorporation Form. This is a welcome move as it not only reduces paperwork but also give opportunity to reduce the size of the form which as per Ministry’s website can be a maximum of 5 MB.

4.Partnership Firm can no longer be a member of company

Earlier there was confusion whether partnership firm can become a member of company or not. The Companies Incorporation Rules, 2014 stated that a partnership firm can become a subscriber to Memorandum. However, as a partnership firm is not a separate legal entity there were questions raised over this. To resolve this confusion MCA in this notification have modified the Companies Incorporation Rules, 2014 and from now onwards Partnership Firm can no longer become a member in the company. However, a LLP which is a separate legal entity can become a member of the company.

5.NOC from Applicant if he has already applied for Trademark

During the time of name availability, the applicant should also submit a NOC if he has already applied for Trademark. This shall not only avoid any confusion about the ownership of Trademark Application but also shall increase the chance of getting the name of your choice.

All in all the initiatives shall seriously fasten the process of incorporation and increase the ease of forming business in India.

 

If you wish to register your entity feel free to write to us at Taxmantra.com