This removes the last hurdle for electronic incorporation of new companies without visiting a government office.

The on-line payment facility, which does away with the need to buy, paste and submit physical stamps with the Registrar of Companies (RoC), is now available in 22 states. The government expects to extend it to the rest of the nation soon.

Electronic payment of stamp duty for setting up a company, which has been introduced on September 13, 2009, will become compulsory from January 1, 2010, an order issued by the ministry stated.

The twenty two state governments, which authorised the central government to electronically collect stamp duty on their behalf, will be paid back the amount by the Centre.

Collection of stamp duty falls under the exclusive domain of state governments. The states which are yet to authorise the Centre on collection of stamp duty on their behalf and where the physical stamping procedures will continue, include Chandigarh, Daman and Diu, Himachal Pradesh, Kerala, Goa, Jammu & Kashmir, Dadra and Nagar Haveli, Lakshadweep, Puducherry, Mizoram, Nagaland and Tripura.

The facility of e-stamping is being extended through the web portal of the ministry of corporate affairs. "The government's aim is to make all transactions faster by improving service delivery and making the office of the RoC paper-less," a senior official in the ministry told ET.

With the facility already available, the ministry has given a transition period of three and a half months till the end of 2009, by which time, companies can exhaust their already collected stamps, said the official.

While the Central government expects to get the authorisation from the remaining 12 states and UT's before January 1, 2010, the states that do not authorise the Centre by then will continue to collect stamp duty through the physical mode.

The ministry, which has a computerised network called the MCA-21, already enables e-filing of other statutory documents required under the Companies Act.