Preliminary Steps for Incorporation of Private Limited Company In India

Ministry of Corporate Affairs (MCA) has recently introduced SPICe Form INC-32 which is a Simplified Proforma for Incorporating Company Electronically through Companies (Incorporation) Fourth Amendment Rules, 2016. SPICe or Form INC-32 can help incorporate a company with a single application for reservation of name incorporation of a new company and/or application for allotment of DIN.

This simplified & integrated process for incorporation of a company is done through

Form No. INC-32,

e- Memorandum of Association in Form No. INC-33 and

e-Articles of Association in Form No. INC-34.

1. Purpose of the eForm:

Form INC-32 can help incorporate a company quickly in India by integrating many of the steps into a single process. It has been introduced to do away with filing of various forms.

The eForm-32 has other added benefits wherein the DINs get allotted to those Directors who do not hold a valid DIN and also the Company’s PAN, TAN and ESIC registration can also be obtained easily in a single step.

(Note: Maximum three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company.)

2. Features:

• DSC of Subscribers needed instead of physical sign.
• Date of signing MOA & AOA will be date of affixing DSC.
• DSC of witness needed. If no DSC, no SPICE procedure.
• If the subscriber is foreign nation/Corporate, then he/she must authorise an India resident on his/her behalf respectively.
• Share Capital:

– Minimum authorized and subscribed share capital required for;

– OPC is Rupee one or

– a private company having share capital is Rupees two and

– in case of a public company Rupees seven.

(Note: At least one kind of share capital (Equity/ Preference) should be greater than zero in number of shares as well as amount of shares.)

3. Type of Companies that can be incorporated using SPICe Form INC-32:

Using SPICe Form INC-32, the following types of companies can be incorporated in India:

• Producer Company (only if 2 agricultural corporations are promoters, if there are minimum 10 promoters as applicable for individuals, then normal incorporation process has to be followed).
• Section 8 Company
• New Company – Public or Private or OPC

The company can also be of different categories like company limited by shares, company limited by guarantee or unlimited company.

4. 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.

5. Documents Required for SPICe Form INC-32

The following documents must be filed with SPICe Form INC-32 for incorporation of company:

– Memorandum of Association – Applicable and mandatory only in case of Section 8 company or company with foreign subscribers not having DIN

– Articles of Association – Applicable and mandatory only in case of Section 8 Company or company with foreign subscribers not having DIN

– Affidavit and declaration by first subscriber(s) and director(s) – Mandatory in all cases

– Proof of Registered office address

– Copies of utility bills that are not older than two months

– Copy of approval in case the proposed name contains any word(s) or expression(s) which requires approval from central government

– If the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act, then it is mandatory to attach the trademark registration certificate or trademark application copy

– NOC from the sole proprietor/partners/other associates/ existing company

– Proof of identity and residential address of the subscribers

– Proof of identity and residential address of directors

6. Advantages:

No need to reserve Companies Name prior to Incorporation. Even if companies have applied for name in INC-1, at point No. 5(a)(i) of INC-32 where it has been asked whether approval of name in form INC-1 has been taken, fill NO. But it is advisable to file INC-1 first as only one name can be proposed in this form.

E-MOA & E-AOA.

In form INC-34, select the table applicable to you i.e. which table of AOA is applicable on you. Clauses will appear on the screen. The same can be altered or marked “Not Applicable”.

After getting Certificate of Incorporation, following will be made:

(i)   Rubber Stamp of the company

(ii)  Share Certificates, and

(iii) Printing of 50 copies of Memorandum & Articles of Association.

Fees structure:

Details                                              Govt. fees ( in INR)

Name application                                             1000/-

MOA Stamping fees (Rs.150 per lakh)             150/-

Cost of Digital Signature             600-800/- (each)

Cost of DIN form   500/-

Time frame:

Company formation : 5 working days (Subject to availability of all the papers with proper signature)