Company Setup Eased: Physical Office Checks Scrapped

The Indian government has proposed amendments to the Companies (Incorporation) Rules, 2014, to simplify company setup. These changes aim to reduce red tape by eliminating mandatory physical verification of registered offices in all instances. Instead, verification may become risk-based, conducted by authorized persons with witnesses. This move is expected to ease operational and procedural aspects for businesses, particularly those in co-working spaces or SEZs, though uniform implementation guidance may be needed.

Furthermore, the proposed rules address the liabilities of deceased subscribers in newly incorporated entities (excluding One Person Companies). The legal representative of a deceased subscriber will be required to settle unpaid share subscription amounts, thereby assuming the subscriber's rights. While this resolves a legal gap, potential practical challenges regarding awareness, succession disputes, and heirs' willingness to assume liabilities are noted by experts. The overall goal is to create a more flexible, technology-enabled incorporation process.