Incorporation of company in India
A Step towards the â€˜MAKE IN INDIAâ€™ campaign and to improve the ease of doing business in India: Again an attempt has been made from my side to share my experience regarding Incorporation of a Company under Companies Act, 2013 in the form of an Article. This Article contains the procedure for Incorporation of a Company under Companies Act, 2013
Incorporation is the legal process used to form a corporate entity orÂ company. A corporation is a separate legal entity from its owners, with its own rights and obligations
INTRODUCTION TO INCORPORATION OF A COMPANY IN INDIA
- A Company comes into existence when a group of people comes together with a view of forming an association to exploit the business opportunities by bringing together human resources, financial resources and managerial resources.
- Company is a separate & distinct legal entity, which permits a group of people, as stakeholders, to apply to the government for an independent organization to be created, which can then focus on pursuing set objectives, and vested with legal rights such as to sue and be sued in its own name, own property, hire employees or loan and borrow money.
- As you move into the new house, first, there is a huge process of â€œgetting used toâ€ â€“ which is anyway usual for any such shifting. But the biggest issue is â€“ we get to realize several shortcomings that we did not realize until we shifted. This might include silly things such as an electric point that we missed, or a water outlet that is not working, and so on. In case of the new house, all these are our own follies, or those of the architect â€“ so we go ahead and get them fixed. In case of the new Act â€“ the fixing process is the long trail of amending the law, and in the meantime, you have the 6-months-in-jail staring at you all the time!
A company may be formed for any lawful purpose by:
- Seven or more persons, where the company to be formed is to be a public company;
- Two or more persons, where the company to be formed is to be a private company; or
- One person, where the company to be formed is to be One Person Company, that is to say, a private company.
Minimum number of Directors required in a Company:
The minimum number of directors required to run a company-
- In the case of Public Company, the minimum number of directors shall be three.
- InÂ theÂ case of Private Company,Â theÂ minimum number of directors shall be two.
- InÂ theÂ case of One Person Company,Â theÂ minimum number of directors shall be one.
- And for other types of companies, the minimum number of directors shall be required as may be prescribed by law.
So, now there are 2 ways to incorporate a company
1. Incorporation of a company through a Normal process i.e. INC-7:
- INC-7 for Incorporation of company with more than seven subscribers
- DIR-12 For appointment of FirstÂ Director
- INC-22 for address of registered office of the Company
2. Incorporation of a company through a New process i.e. Single Window for incorporation Spice Form INC-32:
- Â INC-32 (formerly INC-29)
- Â INC-33 e-MOA
- Â INC-34 e-AOA
Note: Only one name can be filed under Spice Form INC-32. However, if you need to file more than one name, then you may file INC 1 before SPICE form-32, 6 Names can be filed under INC- 1 form.
Ministry of Corporate Affairs (MCA) has recently introduced SPICE Form INC-32 which is a Simplified Performa for Incorporating Company Electronically through Companies (Incorporation) Fourth Amendment Rules, 2016. SPICE FORM 32 can help in the incorporation of a company with a single application for:
- Reservation of name
- Incorporation of a new company and/or
- Application for allotment of DIN.
(Note: Maximum three Directors are allowed for using this integrated form for filingÂ Â Â Â application of allotment of DIN while incorporating a company).
Purpose/ Advantages of the eForm:
Form INC-32 can help in incorporating a company quickly in India by integrating many of the steps into a single process. It has been introduced to do away with the filing of various forms.
- No need to file a separate form for first director (DIR-12)
- No need to file a separate form for address of registered office (INC-22)
- No need to file a separate form for registration of PAN, TAN.
- DSC of Subscribers needed instead of physical sign.
- Date of signing MOA & AOA will be the date of affixing DSC.
- DSC of witness needed. If no DSC, no SPICE procedure.Â Â
Type of Companies that can be incorporated using SPICe Form INC-32:
- Private Limited Company
- Public Limited Company
- One Person Company
- Section 8 Company
- Foreign company
(Note: For incorporation of producer companies, unregistered companies and companies being formed with more than 7 subscribers, new version of INC-7 shall be used).
This simplifiedÂ & integrated process for incorporation of a company is done through:
- SPICe Form INC-32
- e- Memorandum of Association in Form No. INC-33 and
- E-Articles of Association in Form No. INC-34.
Declaration by Professional
The digital signature of a professional (Chartered Accountant/ Company Secretary/ Cost Accountant/ Advocate) is required to file Form INC-32. The professional must declare that all information presented in the form is correct and enter his/her membership number and certificate number.
Mandatory Attachments of spice form
- Memorandum of association
- Articles of Association
- Affidavit and declaration by first subscriber(s) and director(s)
- Proof of Office address (Conveyance/ Lease deed/Rent Agreement etc. along with rent receipts)
- Copy of the utility bills (not older than two months)
(The Integrated Form INC-29 has been replaced with SPICe Form INC-32 and as such the Form INC-29 have been completely removed from the MCA portal. The SPICe Form INC-32 is very similar to Form INC-29, which also helps with fast track incorporation of a company in India).
SPICe Form INC-32 is surely an improvised version of e Form-29, while drafting the SPICe form, an accommodation was made to changes that benefited the stakeholders by reducing timelines and multiplicity of several forms in the process of Incorporation. SPICe will become the standard form and format for all incorporation related purposes.
Disclaimer: [This article has been prepared on the basis of information available till date. But professionals are advised to study the laws and compliance thoroughly before carrying out the incorporation process using SPICE system].
We provide service for Registration, Incorporation and Formation of various companies ranging from Private, Public, Section 8 (Non-Profit Organization), and Wholly Owned Subsidiaries of Foreign Companies & LLP.
For any queries related to Incorporation please contact:-
J. K. Gupta & Associates
257, Vardhaman City Center,
Gulabi Bagh Near Shakti
Nagar Railway Under Bridge
Phone No- 011-23654449/ +919810043622
Email Id:- [email protected]