Incorporation of a Company in India is governed by Section 7 of the Companies Act,2013 read with Companies(Incorporation)Rules,2014. It involves a legal procedure to be followed and requires drafting and submission of various documents.
Introduction of Companies Act,2013 led to the introduction of various amendments in the Company Law. Major amendments were made by the Central Government in the area of incorporation as well. For Incorporation, the first “SPICe” i.e. INC-32 (Simplified Proforma for Incorporation of Company Electronically) was introduced by the Ministry of Corporate Affairs through Companies (Incorporation) Fourth Amendment Rules, 2016. With the launch of SPICe, existing forms for the incorporation of a company(i.e. INC-29 and INC-7)has been phased out.
What is SPICe?
SPICe is an integrated single point application for incorporation of Company, reservation of Company Name, Allotment of DIN for Directors, Allotment of PAN and TAN to the New Company. SPICe form is an improved version of INC-29 with lots of changes. It is different from INC-29 in a way that it contains a provision for entering a previously approved name, and thus securing the name. But talking about INC-29, it did not contain any such provision thereby leading to chances of resubmission or rejection of the application. SPICe has simplified the procedure of incorporation and aid in the avoidance of filing multiple forms.
Types of Companies:-
Following types of companies can be registered using the SPICe Form INC-32:-
- Private Company – It means a Company which by its Articles restrict the right to transfer its shares, limits the number of its member to 200 and prohibit any invitation to the public to subscribe to its securities.
- Public Company – It means a company that is not a private company.
- One Person Company(OPC) – It means a Company which has only one person as a member.
- Producer Company – It is a Private Limited Company formed for pursuing the objects specified u/s 581B of the old Act.
- Section 8 Company – Limited Companies which have the object of promotion of commerce, research, education, religion, protection of the environment, charity or any such other related object (Was not available in INC-29).
- Part I Company
Companies can also be of different classes like companies limited by guarantee, a company limited by shares or unlimited company.
With SPICe, following e-forms were introduced –
1. e-form INC-32 as an integrated application form for incorporating a new Company, Reservation of the name, application for PAN and TAN and application for allotment of DIN. Application for allotment of DIN through SPICe INC-32 can be made maximum by 3 Directors.
2. e-form INC-33 for filing e-MOA.
3. e-form INC-34 for filing e-AOA.
Simplified brief Procedure for Incorporation through Spice:-
- First decide the category, type, and class of company which is proposed to be incorporated.
- Decide two proposed names for the Company and file an application for name approval via RUN(Reserve Unique Name)facility available on www.mca.gov.in with fees of ₹1000/-.
Features of RUN-
- One chance of resubmission is allowed with another set of two proposed names.
- Where a name requires the approval of the Sectoral Regulator, it is compulsory to attach relevant documents and NOC, if applicable as per the Companies(Incorporation)Rules,2014. In other cases, it isn’t mandatory to attach documents while reserving the name.
- Mentioning the name or number of proposed Directors in RUN is not needed.
NOTE: * It is optional to apply for name approval through RUN. Companies can also directly apply through SPICe for Name*
3. If the proposed name is available then CRC(Central Registration Centre) will issue the name approval letter which will be valid for a period of 20 days, in which the company is required to be incorporated, otherwise, the name availability will lapse. The validity of 60 days is available in case an existing company changes its name.
4. After approval of the name by CRC, the applicant needs to prepare the following mentioned documents :
- PAN Card of all the subscribers;
- Declaration by first Director(s) and Subscriber(s) in Form INC-9;
- Consent of all persons who are proposed to be Director(s) in Form DIR-2 with Copy of Identity Proof and residential address;
- Where the subscribers/ Director does not have a DIN, there is a compulsion to attach the Identity Proof and residential address of the subscribers;
- Copy of the utility bills or electricity bills of Registered Office which should not be older than 2 months;
- If the property is not owned, NOC on a plain paper from the owner of the property;
- It is important for all the Subscribers to have DSC.
5. After the above-mentioned documents are prepared, the applicant shall fill the information in the e-form SPICe INC-32.
6. After the SPICe form is filled, the e-form INC-33 (MOA) and INC-34 (AOA) shall be downloaded by the applicant from the MCA website. After the form is downloaded, the information in the forms is to fill as per the requirement of Table A to J of Schedule I.
- After completely filing of the form affix DSC of all the subscribers and professionals on subscriber sheet of the MOA & AOA. (Professional and Subscriber should sign the form on the same date)
- Specifying thePAN & TAN details in the SPICe Form INC-32 is mandatory
7. Company can apply for GST/IEC through the AGILE Form. If GST registration or IEC is to be obtained by the company then it has to select yes in the form and fill in the relevant details. On the other hand, if the company doesn’t want to apply for GST/IEC through SPICe it has to select no in the form.
8. As all the four forms (i.e. INC-32, INC-33, INC-34, and AGILE form) gets ready with the applicant, it shall be uploaded as a linked form on www.mca.gov.in with payment of relevant filing and registration fee.
9. The Central Registrar of CRC will scrutinize the said form and after being satisfied Incorporation certificate shall be issued with CIN, PAN & TAN.
Disadvantages of SPICe:-
This system of incorporation involves the following setbacks:-
- Only Maximum seven subscribers are allowed. When the subscribers are more than seven, the SPICe form shall be filed with MOA and AOA as an attachment.
- Since the Digital Signature of all subscribers is needed and witness also necessary, this process of incorporation is a bit expensive.
Recent Amendments in SPICe:–
According to the recent amendment in companies act-:
- incorporated on or after 26 January 2018 &
- having a nominal capital of not more than ten lakh rupees or Companies not having a share capital whose number of members as stated in the AOA is less than or equal to twenty,
fee on SPICe INC-32 shall not be applicable.
The new version of the SPICe form makes it mandatory on part of new incorporation applications to apply for PAN/TAN. GST/IEC can also be applied through the AGILE form.
SPICe is a single-window form for incorporation of a Company in India. It has fastened the process of incorporation. However, even if a SPICe form is used and if incorporation documents are drafted by a professional within 1 day, it would take about 4–5 working days for full incorporation of a company. (1 Day for Document Preparation, 1 Day for Signing Documents, 1 Day for DSC Processing and 1 Day for Incorporation Processing).
- The FAQ on RUN – http://www.mca.gov.in/MinistryV2/runServicerFAQ.html
- The FAQ on SPICe – http://www.mca.gov.in/MinistryV2/spicefaq.html
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