Incorporation Under section 7 of Companies Act 2013 | FORM SPICe+

Incorporating a company in India is a significant step for entrepreneurs, and understanding the process is crucial to ensure a smooth and compliant registration. The use of FORM SPICe+ under Section 7 of the Companies Act, 2013 simplifies the incorporation process and offers various services. This article provides a detailed overview of SPICe and SPICe+ forms, essential pre-requisites, documents needed, and the importance of reserving a company name. Let’s explore the incorporation journey and learn how to establish a new business venture effectively.

The incorporation process begins with the use of SPICe or SPICe+ forms, allowing entrepreneurs to reserve a company name, apply for a Director Identification Number (DIN), or incorporate a new company. While SPICe offers three services, SPICe+ integrates ten services from three Central Government Ministries & Departments and one State Government (Maharashtra). This enhancement is part of the Ease of Doing Business (EODB) initiative by the Government of India, facilitating a more business-friendly environment.

To initiate the incorporation process through SPICe+, applicants must have a login account, a valid e-mail address, and a mobile number. A digital signature certificate (DSC) or a USB token is mandatory for security purposes. Additionally, applicants need specific documents, including proof of identity and address of subscribers and directors, Memorandum of Association (MoA), Articles of Association (AoA), and declarations by subscribers and first directors.

Part A of SPICe+ enables reserving the company name, while Part B covers the incorporation and application for other integrated services. It is crucial to follow the time limit for reserving a company name to avoid complications. Prohibited words and phrases in company names, as well as trademark searches, must be thoroughly checked before reservation.

Detailed Analysis is as follows:- 

Forms

1. SPICe

1. SPICe is an eform that can be used to:

• • incorporate a new company,
  • reserve a company name, or
  • apply for a DIN.

2. SPICe is a standalone form, which means that it does not offer any other services.

2. SPICe+

1. SPICe+ is an integrated web form that offers 10 services by 3 Central Government Ministries & Departments:

1. Ministry of Corporate Affairs (“herein after refer to as MCA”)

2. Ministry of Labour

3. Department of Revenue in the Ministry of Finance

2. SPICe+ also offers one service by a State Government:

• • Maharashtra

3. SPICe+ is a part of the Government of India’s Ease of Doing Business (EODB) initiative, which aims to make it easier and cheaper to start a business in India.

Pre-requisites for starting the incorporation process through SPICe+

SPICe+ is a post-login service, which means that you must first create a login account or log in to an existing account before you can use the service.

Existing users can log in using their credentials.

The following are the pre-requisites for starting the incorporation process through SPICe+:

1. SPICe+ is a post-login service, which means that you must first create a login account or log in to an existing account before you can use the service.

2. Existing users can log in using their credentials.

3. New users must create a login account before they can use the service

4. Applicants must have a valid e-mail address and mobile number.

5. Applicants must have a digital signature certificate (DSC) or a USB token.

6. Applicants must have the following documents ready:

• • Proof of identity of subscribers
  • Proof of address of subscribers
  • Proof of identity of directors
  • Proof of address of directors
  • Proof of name reservation (if applicable).
  • Memorandum of Association (MoA) (refer Documents needs to be filed with the Registrar, below)
  • Articles of Association (AoA) (refer Documents needs to be filed with the Registrar, below)
  • Declaration by first subscribers and directors

INC-9 shall be auto-generated in pdf format and would have to be submitted only in electronic form in all cases, except where:

• • Total number of subscribers and/or directors is greater than 20 and/or
  • Any such subscribers and/or directors has neither DIN nor PAN.

Documents needs to be filed with the Registrar

(1) The Memorandum of Association (“MoA”) and the Articles of Association (“AoA”) of the company.

It is mandatory to use eMoA (INC-33) and eAoA (INC-34) in case the number of subscribers are up to 7 and in the following scenarios:

• • individual subscribers are Indian nationals,
  • individual subscribers who are foreign nationals in case they valid DIN and DSC and also submit a proof of a valid business visa,
  • non-individual subscribers based in India.

Physical copies of MoA/AoA: Physical copies of the MOA and AoA must be signed and attached in the following cases:

• • If the company has more than 7 subscribers.
  • If the first subscribers are non-individuals and are based outside India.
  • If the first subscribers are individual foreigners who do not have a valid business visa, and
  • Such other case as prescribed.

(2) A declaration by person who is engaged in the formation of the company viz.:

1. • An Advocate,
   • A Chartered Accountant,
   • A Cost Accountant, or
   • A Company Secretary

 and by a person named in the articles viz:

• • Director,
  • Manager, or
  • Secretary of company,

that all the requirements of the Companies Act, 2013 and Rules made thereunder in respect of registration and matters precedent or incidental thereto have been complied with.

(3) Declaration by subscribers and first directors: Every subscriber to the memorandum and every person named as a first director in the articles must file a declaration stating that they:

1. • Have not been convicted of any offence in connection with the promotion, formation, or management of any company.
   • Have not been found guilty of any fraud or misfeasance or of any breach of duty to any company under the Companies Act, 2013 or any previous Company law during the last five years.
   • All the documents filed with the Registrar for registration of the company contains information that is correct and complete and true to the best of his knowledge and belief.

INC-9: INC-9 is a form that is used to file the declaration by subscribers and first directors. It is auto generated in PDF format and must be submitted in electronic form in all cases, except where the total number of subscribers and/or directors is greater than 20 and/or any such subscribers and/or directors has neither DIN nor PAN.

(4) The address for correspondence till its registered office is established.

(5) The particulars of every subscriber to the memorandum along with proof of identity, as prescribed under Rule 16 of the Companies (Incorporation) Rule, 2014.

(6) Particulars of first directors of the company and their consent to act as such.:

• • The particulars of each person mentioned in the articles as first director of the company and his interest in other firms or bodies corporate along with his consent to act as director of the company shall be filed in Form No. 12 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014.

SPICe+ PART-A: A comprehensive guide to reserving a company name in India

i. Part A of SPICe+ can be used to reserve the name of a new company.

ii. Part B of SPICe+ can be used to incorporate a new company and apply for other integrated services.

iii. If you only want to reserve a company name, you can submit Part A of SPICe+ separately.

iv. If you want to incorporate a company and apply for other integrated services, you can submit Part A and Part B of SPICe+ together.

From 23rd February 2020 onwards, RUN service would be applicable only for ‘change of name’ of an existing company.

• Section 4(2) & (3) of the Companies Act, 2013 prohibits the use of certain words in company names. These words inter-alia include “bank,” “insurance,” “university,” and “college.”
• Rule 8 of the Companies (Incorporation) Rules, 2014 further elaborates on the prohibited words and phrases that cannot be used in company names.
• The Trademark search is a database that is used to check whether a proposed company name is already in use by another company.

Therefore, when a user is reserving a company name, they must ensure that the proposed name does not contain any of the prohibited words or phrases. They must also check the Trademark search to ensure that the proposed name is not already in use.

You can reserve two company names in Part A of SPICe+, but you must submit two separate applications. Also you will also need to pay the prescribed fee, which is currently Rs. 1000.

Other Important points:

• The time limit for reserving a company name in SPICe+ is twenty days from the date of approval. This means that you have twenty days to incorporate your company or change the name of an existing company after reserving the name.
• If you do not incorporate your company or change the name of an existing company within twenty days, the name will be released, and you will have to start the reservation process again.
• There is an exception to this rule. If you are reserving a name for a company that is already incorporated, you have sixty days to incorporate the company after reserving the name.

The time limit for reserving a company name is important because it ensures that the name is not reserved for too long and that other companies have a chance to use it. It also helps to prevent companies from reserving names that they do not intend to use.

If the proposed name does contain a prohibited word or phrase, or if it is already in use, the name will be rejected.

Attachments to Part A of SPICe+ form

When to attach documents and NOCs in Part A of SPICe+:

• • You must attach relevant documents and NOCs in Part A of SPICe+ only when you are applying for a name that requires the approval of a Sectoral Regulator or NOC, as per the Companies (Incorporation) Rules, 2014.

File size limitations:

• • Only one file is allowed to be uploaded as an attachment in Part A of SPICe+.
  • The size of the file should not exceed 6MB.
  • If you are filing both Part A and Part B of SPICe+ together, the overall limit of form size should not exceed 6MB.
  • If you have multiple attachments for Part A of SPICe+, please scan all documents into a single file and upload the same.

SPICe+ PART-B: Everything you need to incorporate your company, all in one place

1. AGILE-PRO contains application for GSTIN/EPFO/ESIC/Profession Tax Registration (in Maharashtra) and Opening of Bank A/c.

2. All new companies incorporated in India on or after February 23, 2020, must register with the Employees’ Provident Fund Organization (EPFO) and the Employees’ State Insurance Corporation (ESIC). These are two statutory bodies that provide social security benefits to employees in India.

3. Registration for Profession Tax shall be mandatory through SPICe+ only in respect of new companies incorporated in the State of Maharashtra w.e.f 23rd February 2020.

4. All new companies incorporated through SPICe+ (w.e.f 23rd February 2020) would also be mandatorily required to apply for opening the company’s Bank account through the AGILE-PRO linked web form.

This change was made in order to streamline the registration process for new companies and to reduce the administrative burden on the EPFO and ESIC.

Registered office of Company

• The registered office address of the company has to be updated via Form No. INC-22 or Form No. SPICe+ Part B.
• A company must have a registered office within 30 days of its incorporation. The registered office is the official address of the company, and it is where all communications and notices are sent. The company must ensure that someone is present at the registered office during normal business hours to receive and acknowledge these communications.
• The registered office must also be a physical location in India. It cannot be a post office box or a virtual office. The company must also ensure that the registered office is easily accessible to the public.
• If a company does not have a registered office, or if the registered office is not accessible to the public, the company may be penalized by the government.

Commencement [INC-20A]

A company having share capital is required to file the declaration for commencement to the Registrar of Companies (RoC). The declaration is to be filed by a Director in INC-20A application within one hundred and eighty days of the date of incorporation of the company.

Important Check Points while filling up the webform:

• Please attach the required mandatory supporting documents in the specified format only.
• Please ensure that applicant of the webform is registered at MCA portal before filing the webform.
• Please note that the Company for which the webform is being filed shall be registered with MCA and shall have a valid CIN.
• Please ensure that the business user is associated with the company or authorised by the company to e-file on its behalf (applicable to other business user).
• Please ensure that the signatories have an approved DIN or valid PAN or valid Membership number.
• Please ensure that the Practicing professional signing the form shall have a valid membership number.
• Please ensure that DIN of the director signing the webform is not flagged for ‘disqualification’.
• Please ensure that the no other webform INC-20A is pending for approval/ approved/ pending for payment against the CIN.
• Please ensure that the registered office address of the company is updated via Form No. INC-22 or Form No. SPICe+ Part B.
• Please note that this form can be filed only by a company having share capital.
• Please ensure that status of the company is ‘Active’.
• Please ensure that the form shall not be signed by a director of the company in respect of whom Form No. DIR-12 is pending for approval.
• Please ensure that the DSC attached in the webform is registered on MCA portal against the DIN/PAN/Membership number as provided in the webform.
• Please note that the signing authority of the webform shall have valid and non-expired/non-revoked DSC.
• If the space within any of the fields is not sufficient to provide all the information, then additional details can be provided as an optional attachment to the webform.
• Please check for any alerts that are generated using the “Notifications and alerts” function under the ‘My Workspace’ page in the FO user dashboard on the MCA website.