Simplification in Procedures and Rules to Bring Transparency in Service Delivery

Posted on    28 March 2011


Simplification in Procedures and Rules to Bring Transparency in Service Delivery


In order to cut timelines and to bring transparency in service delivery, the Ministry of Corporate Affairs has simplified certain Procedures and Rules. Some of the important Procedures which have been simplified are as under: -- 

Simplification of issuing Director Identification Number (DIN) process: 

As per section 253 of the Companies Act, 1956, no person can be appointed as Director of the Company unless he has been allotted a DIN from the Government on his application. At present it takes about 2 to 5 days in this process of filing applications, its examination and allotment of DIN. 

In the revised process the DIN applications will be filed in e-form DIN-1 and scanned documents in support of the particulars of the applicant will be attached with the e-form. No physical documents will be accepted. 

Where this e-form is digitally signed by the practicing Chartered Accountant or Company Secretaries or Cost Accountants, verifying the particulars of the applicant given in the application, the DIN will be allotted by the system immediately online. 

In other cases, where the DIN form is digitally signed by the applicant only, the applications will be examined by the Central Government and will be disposed off within two to three days. 

Similarly, DIN-4 (changes of particulars of director) is also being made an e-Form which shall be submitted online and shall be processed through STP mode. 

Penal action against the applicant and professional certifying the DIN application in case of false information / certification as per provisions of section 628 of the Act will be taken in addition to action for professional misconduct and revocation of DIN allotted on false information. 

This revised process is being implemented w.e.f 27th March,2011. 

Improving Service Delivery Time of Approval of company registration [registration in 24 hours]: 

Ministry is focussing on prioritising the processing of incorporation forms. At present there is no special priority of registration of e-forms connected with the above services i.e., incorporation of companies, including registration of principal place of business in India by a Foreign Company ] by the Registrar of Companies]. In the revised process the e-forms no. 1, 1A, 18, 32, 37, 39, 44 and 68 which are connected with incorporation services have been given highest priority for approval through the system. Now all Registrar of Companies have to first approve above critical services before attending any other forms. Ministry would also ensure that all other critical e-forms are also processed within the service delivery parameters as given in the citizen charter. 

Implementation of enhanced Regulatory framework on Annual statutory filings 

All Companies which have not filed their statutory annual filings for both form 20B and 23AC/23ACA since 2006 i.e. 2006-2007, 2007-2008 and 2008-2009 (i.e. has not done any of the six required filings) will not be allowed to file any other e-form with Ministry unless and until all such pending documents are filed. The status of such companies would be changed to “Dormant “. Each such company having the status as “Dormant” will have to file an application for normalising in eform-61 and once e-form 61 is approved by respective Registrar of Company, the company will be given a stipulated period of 21 days for filing all the due balance sheets and annual returns from the date of approval of form61. If all the due documents are not filed within this period, the company’s status will again be reverted to “Dormant” and will have to follow the process of filing form 61 once again. 

Ease of payment of statutory fees to Ministry [discontinuing of physical challans] 

In the interest of stakeholders, with a view to improving service delivery time, Ministry has decided to accept payments of value upto Rs.50,000 for MCA 21 services ,only in electronic mode. 

For the payments of value above Rs. 50,000, stakeholders would have the option to either make the payment in electronic mode, or paper challan. However in the second phase, such payments would also have to be made in electronic mode only. 

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