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Ministry of Corporate Affairs (MCA) w.e.f. January 26, 2018 has replaced Form INC-1 (Application of Reservation of Name) with a simple web form Reserve Unique Name or 'RUN'. 'RUN' is a one more attempt of Ministry and Government of India to simply improve the Ease of Doing Banking Ranking. While the earlier form INC-1 required quite a few details and Director Identification Number (DIN) and Digital Signature Certificate (DSC) of applicant/director. 'RUN' has simply done away with the additional information.

RUN is a welcome change from the old and customary e-Forms MCA has asked till date. It's a web form which does not require, DIN/DSC or any extra details. To know steps and how to apply name through RUN - click here

However, since the introduction of web form RUN, it has been observed that maximum application made through RUN are rejected by CRC with most of the rejection we citing a reason as 'resembling name' and there are still lack of awareness among the applicants and the CRC about which name might get approved and which may not be approved. Also, with just 1 choice of name available with no resubmission available, earlier 12 names option to choose from has now reduced to just 1 name.

While recently government has done away with the ROC fees for Incorporation of a Company with Capital upto Rs. 10 Lakhs, however, these multiple filing of RUN application the cost for the Incorporation has not changed much or in certain cases Promoter has ended up paying more fees in getting name approved as against the earlier system with ROC Fees on incorporation of the Company.

Lets look at the standard cost of incorporation of a Company with Rs. 10,00,000 Authorized Share Capital in Maharashtra:

Option 1 : ROC Fees when name is applied through RUN - Presuming it is approved in the first attempt (other expenses are not considered)


Sr. No.

Nature of Expense

Amount (Rs.)

1

RUN filing fees

1,000*

2

PAN and TAN Fees

175

3

Stamp Duty on MOA and AOA

2,300

Total

3,475

* Since no resubmission is available, sometimes it takes 3-4 attempts to get the name availability. Applicant will need to pay Rs. 1,000 per application as ROC Fees.

Option 2: ROC Fees when name is applied along with SPICe form (other expenses are not considered)


Sr. No.

Nature of Expense

Amount (Rs.)

1

PAN and TAN Fees

175

2

Stamp Duty on MOA and AOA

2,300

Total

2,475


While the name approval probability remain same in both the option, in case of application filed through SPICe, the applicant gets total 3 attempts to get the Name (including 2 resubmission). Though, its not easy to get the name approval through SPICe and if name is rejected in SPICe form applicant will need to revise all the documents which has proposed name of Company and it might be a hardship.

Another advantage of filing application directly through SPICe is that once the application is approved a company is incorporated whereas in case of RUN filing, it takes entire process again and one day incorporation nowadays are taking 7-10 working days in approval if filed through RUN.

Though, its not a long-term solution but looking at the current situation, it is advisable to file incorporation application directly through SPICe instead of going for RUN.

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Category Corporate Law, Other Articles by - CS Jigar Shah 



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