In a move aimed at easing the process of setting up companies, the government has proposed amendments to the Companies (Incorporation) Rules, 2014, including doing away with mandatory physical verification of registered offices in all cases and introducing norms to address liabilities of deceased subscribers in newly incorporated entities.

The Ministry of Corporate Affairs (MCA), in a draft notification released for public comments, said the proposed changes seek to simplify procedures, reduce duplicate filings, expand the use of electronic communication and align incorporation processes with other regulatory frameworks such as GST and the Insolvency and Bankruptcy Code (IBC).

Legal experts view the proposed changes as a significant step toward reducing procedural hurdles for businesses. Ricky Chopra of Ricky Chopra International Counsels said the reforms could materially ease both operational and procedural aspects of setting up companies.

“The red tape ensuing from elongated paperwork is clearly shown the door, and bringing together of multiple forms into a couple of e-forms will be instrumental in avoiding filing delays,” Chopra said, adding that measures such as liberalised Director Identification Number (DIN) allotments and removal of bulk affidavits could encourage greater participation from investor-led businesses and MSMEs.

Moin Ladha, Partner at Khaitan & Co, said the amendments signal a shift from a documentation-heavy approach to a more practical, risk-based framework. According to him, the proposals address long-standing gaps such as subscriber liability in the event of death, while easing compliance requirements at the entry stage.

Under the draft, physical verification of registered offices by the Registrar would no longer be mandatory in all cases. Instead, verification may be conducted through an authorised person, in the presence of two local witnesses and, where required, with assistance from local police, based on available information and documents. This effectively introduces a risk-based and need-based approach to inspections.

The draft also proposes expanding the list of acceptable documents and providing clearer scenarios for verification of registered offices. According to Manvinder Singh, Partner at JSA Advocates & Solicitors, this could particularly benefit companies operating from co-working spaces or located in Special Economic Zones (SEZs), where documentation requirements have often been ambiguous.

However, Singh cautioned that clearer guidance or standardisation may still be required to ensure uniform implementation across jurisdictions.

Another key proposal is the insertion of a new rule to address cases where a subscriber to a company dies before paying for shares subscribed at the time of incorporation, excluding One Person Companies.

Under the proposed rule, the legal representative of the deceased subscriber would be required to pay the unpaid subscription amount. Once payment is made, the legal representative would assume the rights of the original subscriber, effectively stepping into their position.

While the provision seeks to resolve a long-standing grey area in company law, experts warn that it may create practical challenges. Singh noted that issues could arise where legal representatives are unaware of subscription obligations, succession disputes exist, or heirs are unwilling to assume financial liabilities, potentially complicating enforcement.

Overall, the proposed amendments signal the government’s continuing push to streamline company formation procedures, reduce compliance burdens and introduce greater flexibility through technology-enabled processes.

Published on April 10, 2026