Why INC 29 is not a better choice for registration of Indian Company
EForm INC-29 deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN. This eForm is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc. Once the eForm is processed and found complete, company would registered and CIN would be allocated. Also DINs gets issued to the proposed Directors who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for allotment of DIN while incorporating a company.
Advantage of INC 29
The only advantage is that just 1 single form is required instead of 5.
- Only one Name can be provided for Name Approval, unlike in normal process 6 . If the names are not approved , All the documents Including affidavits needs to be prepared again as the documents are prepared on the basis of Proposed Names and these documents are to be provided along with all documents , unlike in earlier case it was only prepared after Name Approval.
- If the Names get rejected, it will result in loss of not just name approval fees but the entire incorporation fees , stamp duty fees , fees for MOA &AOA will be lost. ( Just for the information , as per our Source Out of 3 every 1 files are asked for resubmission , where the option of 6 names are to be provide , with just 1 names , things will definitely get worse ). Refund option are not available for all forms.
- Extra Cost of Rs 2000 , that’s not too much considering the fact 5 forms have been reduced but still for a start up , every single rupee count.
- Just because its 1 form doesn’t mean it save time, On the contrary we believe it will take same amount of time if not more for a Company Registration ( why ? If a name is asked for resubmission , you have again prepare each and every single documents , affidavit ,NOC in the new name …..and what if again the new name is not approved ?? )
- File Size , if you have registered a Company, you must be aware that how file size becomes a headache to put in so much documents in INC 7 and keeping them under 2.6 mb is really a tough ask. Now with INC 29 the documents which were to attached in INC 1, INC 7 , INC 22 and DIR 12 are to be attached in just 1 form and to make the documents size of less than 2.6 MB will be a tough ask, when the Form itself is 1.3 mb and DSC will take around 500kb more. Will the form offer scope for submitting extra documents just like in annual return needs to be seen.
WHO WILL BE BENEFIT FROM INC 29 ??
We aren’t saying it’s the worst thing to happen….But it will be beneficial for
- Foreign Companies wanting to register ( as they already have their name approved)
- Group Companies, its easier to get names if you already have a Company Registered, example : Flipkart Online Services Private Limited Company wanting to get a new Company with Flipkart Brand Name like Flipkart Construction Pvt Ltd subject to availibility
- If you have applied for Normal process and your Name lapsed if you failed to incorporate it within 60 days, herein you can use INC 29 instead of again filing all forms.
- IF you are 200% sure that you will get the Name .
Please Note : These are very early stage and hence our article is entirely based on our past experience in Registering a Company and the new rules in regards to INC 29. Form INC 29 do make Incorporation simple but will it be lesser of a headache needs to be seen in near future.