Tag Archives: Ease of Doing Business

Propaganda against Compliance Tools

Politics is claimed to be a dirty game of propaganda in India and the public already accepted it as a reality of life. Unfortunately, Indian professionals start using similar tools against compliance regime and compliance professionals. Role of the media is also come to under strong protest recently. This is evident that Indian media do no research and do not cross verify the facts. Recently published propaganda titled “FM Nirmala Sitharaman urged to waive e-form 22A for firms” published by Deccan Chronicle on 12th June 2019 and copied by few others seems to be published without cross-checking on law and facts.

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Bye – Bye Digital Signature Certificates!!

Inter – ministerial task force on secured authentication of legal documents actively discussing retina signatures which next logical step after introduction of biometric identification system in India. Indian mainstream media undermined these reports amid its stir on recent development in Uttar Pradesh.

Under critically proactive leadership of Prime Minister Narendra Modi an inter-ministerial task force was formed just after demonetization to consider digital cash, digital contracts and digitization of legal and court documents. The task force includes highly places officers of Ministry of Finance, Ministry of Law & Justice, Ministry of Information Technology, Unique Identification Authority of India, Ministry of Health & Family welfare. Highly placed sources suggest that a prime intelligence agency of nation is also involved and getting help from an agency of a friendly foreign nation.

Retina signature is a unique technique developed by a research group consist of countries premier medical colleges and information technology universities. This is quite advance technique user shall sign just showing his retina to camera attached to his laptop, mobile or desktop. This futuristic system shall replace token based digital signature certificate and can be used anytime anywhere by anybody. Though, it will be restricted presently for human need, this technique is so advance that it can be even be used by advance animals using their retina. Retina signature will eradicate need for renewal of digital signature certificates. This technology provides lifelong free signatures subject to good health and maintenance of retina. Any kind of file type may be signed using retina signature.

Retina is third and inner coat of eye which is a light-sensitive layer of tissue. The unique structure of the blood vessels in the retina has been used for biometric identification. Changes in the retinal microcirculation are seen with aging, exposure to air pollution and may indicate cardiovascular diseases such as hypertension and atherosclerosis.

In proposed methodology, a user shall place his eyes before camera of his mobile or laptop when a document to be signed should be opened before him on same device. It is also possible to sign a documents placed in another device. The retina signature shall capture bio-metrics of retina, system time, internet protocol address and geo-positioning of signatory. Once, signed there shall be no removal of signature from the documents shall be possible unless authorized by competent authority, which shall be a civil judge.

As usual, human right activists are planning to oppose the move. Activists argue that scrupulous elements and police authorities may get retina signature using force and other means. However, government authority denies any such possibilities. The task force working on modalities to make it happened in case blind, mentally challenged and otherwise unhealthy people.

A copy of relevant study document may be assessed here on or after 1st April.


5th Amendment of 2016 in Incorporation Rules

Ministry of Corporate Affairs recently on 29th December 2016 came out with and notified the Companies (Incorporation) 5th Amendment Rules, 2016. These amendments came into force on 1st January 2017.

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Very Soon, Indian Finance Minister will finalize this tax proposal keeping (possible a blind) eye on tax reforms. Indirect tax reforms, even at the central side of constitutional barriers are still at halt just because of long time of eye – wash of Goods and Service Tax reform There is no concrete information on present status and future of Direct Tax Code. We as citizen need to understand and reveal hardship of our tax system and support a simpler tax regime. Our views may help the Government.

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Supreme Court NCLT Decision dated 14th May 2015

This Supreme Court Judgement available here is a milestone in implementation of new corporate law and development of corporate jurisprudence in India. On cautious note, this is just another step effective implementation of law related to National Company Law Tribunal and its appellate body. Now, the Companies Act, 2013 need minor amendment in line of present Supreme Court decision and ball is now in court of political leadership. Supreme Court decided three important issues in the case.

Constitutional validity of NCT and NCLAT:

By Notification dated 12.09.2013, the Central Government has constituted the National Company Law Tribunal (NCLT) under power conferred by Section 408 of the Companies 2013. By the aforesaid Notification dated 12.09.2013, National Company Law Appellate Tribunal (NCLAT) has also been constituted by the Central Government under power conferred by Section 408 of the Companies 2013.

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Irrespective of political parties in power, Government of India fails to deliver any substantial ease of doing business or living life. #EaseOfDoingBusiness #EaseOfLivingLife

There is no real delivery except creating some online filing like MCA21 and online payment of fees, taxes and duties in first fifteen years of this 21st century. Switching to online environment from paper environment is just change of mode not a relaxation for ease of doing business or ease of living life from the side of government. This is just a technical advancement without role of government. One can understand it switching from inkpot system to fountain pen or ballpoint pen, which was also resulted in substantial reduction of time. Another example may be paper based tax calculation to calculator based tax calculation.

Presently, government has also come out of another gimmick called integrated incorporation forms. Without digging deep, name just suggests; there is no ease just integration. Instead of less pain, all quantum of pain at one place one time with more possible error of treatment at once. #EaseOfDoingBusiness #EaseOfLivingLife

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Amended Form INC – 7 (W.E.F. 1 May 2015)

Form INC-7 is required to be filed pursuant to Section 7 (1) of the Companies Act, 2013 and pursuant to Rule 10, 12, 14 and 15 of Companies (Incorporation) Rules, 2014. New version of this form came into force from 1st May 2015 by the Companies (Incorporation) Amendment Rules 2015. This replaced earlier version of Form INC – 7 discussed earlier here.

Form INC-7 deals with incorporation of a new company (other than OPC). This form is accompanied by supporting documents such as details of Directors/subscribers, the Memorandum of Association (MoA) and Articles of Association (AoA) and evidence of payment of stamp duty. Once the Form is processed and found complete, a company is registered and CIN is allocated.

The Form INC – 7 is not required where Integrated Incorporation Form INC – 29 was opted by applicant.

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Amended Form INC – 22 (W.E.F. 1 May 2015)

Form INC – 22 is required to be filed pursuant to Section 12 (2) & 12 (4) of the Companies Act, 2013 and Rule 25 and 27 of the Companies (Incorporation) Rules, 2014.

New version of this form came into force from 1st May 2015 by the Companies (Incorporation) Amendment Rules 2015. This replaced earlier version of Form INC – 22 discussed earlier here.

The company is required to furnish to the Registrar verification of its registered office in Form INC – 22 within a period of thirty days from the date of its incorporation. The company can also specify the address of registered office at the time of filing incorporation Forms. For this, the applicant shall upload Form INC-22 as linked form to Form INC-7. In case of One Person Company, the particulars of the registered office address can be filed in Form INC-2 only.  Any change in situation of the registered office thereafter, the company is required to notify to Registrar in Form INC-22 within fifteen days of such change.

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Form INC-29 deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN. This Form is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc. Once the Form 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.

Select the type of proposed company under drop-down provided. Producer Company should be selected only in case company complies with the provisions of Part IXA of the Companies Act, 1956. Incorporation of a charitable company under section 8 and company defined under chapter XXI of the Companies Act, 2013 are not facilitated under this integrated incorporation form.

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At the time of writing this blog post, I have no information of publication of the Company (Incorporation) Rules, 2015 which seems to come into effect with effect from 1st May 2015 as Official MCA21 portal has issued all forms prescribed under these forms.

I have no words of advice on enforceability of these rules until copy of publication in official gazette. These Rules come into effect only after publication in official gazette. [Rule 1(1) of the Companies (Incorporation) Amendment Rules 2015]


In original Rule 5 discussed earlier here, penalty in relation to contravention of these rules by One Person Company or its officer was prescribed. Rule 5 of these rules is being deleted.

But penalty is still there. New Rule 7A is introduced for the purpose. I highlight effect in deletion of rule 5 and introduction of rule 7A here:

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