MCA Proposes Simplified Incorporation Rules
– Jayesh Rudra, Executive | corplaw@vinodkothari.com
MCA, with the objective of simplifying the incorporation process and enhancing ease of doing business, has issued a public notice dated April 08, 2026, proposing amendments to the Companies (Incorporation) Rules 2014 (“Incorporation Rules”), and inviting public comments on the same. The proposed amendments, inter alia, aim to rationalise and merge multiple forms, reduce documentation requirements, introduce greater flexibility in incorporation and post-incorporation compliances, enable digital modes of communication, and streamline approval processes, thereby providing an overall boost to ease of doing business.
A comparative summary of the existing requirements and the changes proposed is provided below:
| Particular | Existing provision/requirements | Changes proposed |
| Merging of Existing Forms for change of name, shifting of RO, Conversion and approvals | Multiple forms are required for different actions- For change of name and registered office INC-4 (Change in member/nominee by OPC) INC-22 (Change in RO within local jurisdiction)INC-23 (Shifting of RO from one State to another)INC-24 (For change of company’s name) For conversions / approvals / orders: INC-6 (Conversion of OPC)INC-12 (Section 8 licence application)INC-18 (Conversion of Section 8 company)INC-20 (Surrender/revocation of Section 8 licence)INC-27 (Conversion between public/private company)RD-1 (Application to Regional Director) INC-28 (Filing of Court/Tribunal orders) | To reduce multiplicity of filings and repetitive disclosures, the draft draft proposes consolidation of several incorporation-related forms into two simplified e-forms-“E-CHNG” – one single form for changes in registered office and name“E-CON”– one single form for conversions, approvals and orders) |
| Withdrawal of Reserved name | Rule 9A provides for filing of application before Registrar vide SPICE+ for reservation of name at the time of incorporation and RUN at the time of change of name | A proviso to Rule 9A is proposed to be inserted thereby providing flexibility for withdrawal of reserved names permitted before filing of main incorporation forms or name change application. |
| Conversion of Section 8 Company | Existing provisions do not allow conversion of a Section 8 company limited by guarantee to a Section 8 company limited by shares. | Rule 39 is proposed to be amended to allow conversion of section 8 company limited by guarantee to a Section 8 company limited by shares |
| Liability of Deceased Subscriber | Currently, there is no specific provision addressing liability where a subscriber dies before paying for shares at incorporation | New Rule 23B proposed to be inserted thereby providing clarity that in such cases (other than OPCs), the legal representative shall be liable to pay the unpaid amount. Upon payment, the legal representative will assume the rights of the subscriber as if originally subscribed. |
| Shifting of Registered office | ||
| Proof of existence of registered office – Acceptable Documents | Currently, under Rule 25, limited set of documents are accepted as a proof of existence of RO-Ownership proof (registered title document in company’s name)Notarised lease/rent agreement with recent rent receipt (≤ 1 month)Owner’s authorisation/NOC with ownership proofUtility bill (telephone, gas, electricity, etc.) in owner’s name (≤ 2 months) | Rule 25 is proposed to be substituted so that-Clearly cover different scenarios – owned, leased/rented, co-working spaces, and SEZ unitsExpand list of acceptable documents such as title deed, property tax receipt, municipal records (khata), allotment/possession letters, payment receipts, and recent utility billsProvide clarity on requirement of authorisation letter in different cases |
| Shifting of Registered Office during pendency of inquiry investigation | Currently, shifting of registered office is not allowed if any inquiry, inspection or investigation has been initiated against the company or any prosecution is pending against the company under the Act. | Rule 30 (9) is proposed to be revised thereby allowing shifting of the registered office even during pending inquiry, inspection, or investigation, subject to Board undertaking. It also permits shifting in IBC cases where defaults occurred prior to the change in management. |
Apart from the key changes discussed above, the draft rules also propose certain additional amendments, including:
- For conversion of private limited company into OPC:
- requirement of obtaining an affidavit from directors confirming that all the members of the company have given their consent for conversion, to be omitted. [Rule 7(4)(iii)]
- Criminal liability specific to OPCs under Rule 7A is proposed to be omitted
- Rule 8 that provides guidance for Names which resemble too closely with name of existing company is proposed to be simplified and rule 8A regarding trademark related objections is proposed to be substituted thereby providing more clarity thereto.
- List of KYC docs and information required from subscribers at the time of incorporation, as provided in Rule 16, is proposed to be reduced;
- Cap on number of directors for whom DIN can be applied at the time of incorporation is proposed to be increased from three to five.
- Requirement of separate filing of DIR-12 for first directors is proposed to be omitted.
- Copies of public notices to-
- the Chief Secretary and Income Tax Department at the time of shifting of RO or conversion,
- debenture-holders, creditors, Registrar, SEBI and concerned regulators under various sub-rules.
may now be sent via speed post or e-mail, with the registeredpost requirement proposed to be removed
- Physical verification of RO is proposed to be made more flexible through insertion of new Rule 25B, allowing the Registrar to conduct such verification via an authorised person, in the presence of two local witnesses, with assistance from local police if required
Overall, the proposed amendments are a positive step towards making the company incorporation process simpler, faster, and more practical. By reducing the number of forms, easing documentation requirements, and allowing more flexibility in procedures, the MCA aims to lower the compliance burden on companies, especially startups and small businesses.
The changes also bring better clarity in areas like registered office documents, liability of subscribers, and shifting of registered office, which will help avoid confusion and practical difficulties.
Currently, the amendments are in draft form only and comments have been invited from stakeholders on the same by 9th May, 2026. Practical difficulty, if any, in implementation, particularly while filing the revised or new e-forms, can be better assessed once the amendments are finalised and the corresponding e-forms are made available.
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