SPICe (A Bold Initiative By MCA!!!!)

EARLIER IMPACT OF MCA NOTIFICATION:

Earlier with effect from 01/05/2015, MCA came with the integrated process of incorporation by filing E-form INC-29. This was a major step brought by MCA for incorporation of a company which require filing of only one E-form i.e. INC-29 as against five forms filed earlier.

√ DIR-3- for application for obtaining DIN

√ INC-1- for approving the name of company

√ INC-7 – for incorporation of company with MOA and AOA

√ INC-22 – for registered office

√ Form DIR-12 – for first directors of company

NOTIFICATION DATED 1ST OCTOBER, 2016

Ministry of Corporate Affairs introduced a new form namely INC-32 under Spice Scheme vide notification dated 1st October, 2016, through insertion of following Rule by notifying Companies (Incorporation) Fourth Amendment Rules, 2016 :

• Rule 38 has now been inserted in Companies incorporation rules, 2014 and following new e- forms has been introduced

√ INC-32 ( Form for Incorporation )

√ INC-33 ( E- Memorandum of Association)

√ INC-34 ( E- Articles of Association)

SPICE means Simplified Performa for Incorporating Company Electronically. Through this notification, MCA main objective is:

• To provide speedy incorporation related services within stipulated time frames which are in line with international best practices.

MCA has more simplified the process of incorporation by introducing Spice E-form INC-32 which provides the same facilities as were provided in Form INC-29 but now the process becomes more convenient and easy i.e. by introducing new forms for filing of Memorandum and Article of Association electronically. In relation to the old process, it has the potential to save a lot of time, if properly implemented.

CURRENT NOTIFICATION DATED 29TH DECEMBER, 2016

MCA Notified Incorporation Rules namely, Companies (Incorporation) Amendment Fifth Rules and following are the modifications made:

• INC-2 is also now removed off
• INC-7 shall be used for incorporating:

√ Part I Companies and

√ Companies with more than seven subscribers only.

• Newly integrated form namely SPICE E-Form INC-32 along with E-Form -33 and E-Form-34.
• Companies having upto 7 subscribers can only use Spice Form for incorporation of the same.
• Section 8 Company can be incorporated through Spice Route.
• The filing fees have been reduced from Rs. 2000 to Rs. 500.
• Now, the stakeholders are only allowed to resubmit the forms twice.

Note: Revised Form INC-7 shall be made available for filing w.e.f 15th January, 2017.

FEW HIGHLIGHTS OF THE SPICE FORM:

• Simplified and completely digitally form for Incorporation
• Standard format in E-form INC-33 for E- Memorandum of Association
• Standard format in E-form INC-34 for E- Articles of Association
• Provision to apply form Company Incorporation with pre-approved company name.
• Mandatory DSCs of Subscribers and Witnesses in both Spice MOA and AOA.

Following are major changes made in Incorporation through newly introduced Form (INC-32) in comparison with INC-29 and INC-7

> Name Availability:

Under Form INC-7, there was a need to file INC-1 for name availability earlier before incorporation of a company.

Under Form INC-29 there was restriction to file form INC-1 for name availability as form INC-29 itself contains the option to apply for name.

Under Form INC-32, the feature as in Form INC-7 and INC-29 has been changed. Following is the change:

√ At point No. 5(a) (i) of INC-32 there is an option “Whether Name is already approved by Registrar of Companies” Company has to select Yes or No in this Option.

Note:

• If a Company selects Yes then it means it has already been approved by CRC( Centralised Registration Centre)
• If a Company selects No then it means it has not been approved by CRC (Centralized Registration Centre), so write the proposed name in the defined column.

Attachments of Form INC-32

• INC-9 (Declaration by First Subscribers/ First Directors)
• NOC for Registration office of the Company as per Rule 25(2) (c) of Companies Incorporation Rules, 2014.
• A Copy of the utility bills (not older than two months) as per Rule 25(2)(d) of Incorporation Rules, 2014 under CA, 2013 (not older than two months).

Important Note:

♦ There is no need to attach both MOA and AOA as now under Form INC-32, MOA and AOA is to be filed electronically through separate forms namely INC-33 and INC-34

♦  Only one name can be applied for approval in the above named e-form. Therefore, one is advised to duly check the proposed name and follow name availability guidelines, existing trademarks to avoid rejection

♦ There is a facility to apply DIN through INC-32, so, there are 2 cases:

ο If a Person is having DIN:

It is mandatory to attach Pan Card.

ο If a Person is not having DIN:

It is mandatory to attach Pan Card, Identity proof, Address Proof of the concerned.

> E- Memorandum of Association:

Under Form INC-7– It is mandatory to attach Memorandum of Association as per Table A, B, C, D, E defined under Companies Act, 2013 along with its Subscriber Sheet.

Under Form INC-29- It is mandatory to attach Memorandum of Association as per Table A, B, C, D, E defined under Companies Act, 2013 along with its Subscriber Sheet.

Under Form INC-32 – Now there is a facility to file memorandum electronically in E-form No. INC-33.

Following are the steps for filing of INC-33:

√ If name is available then select from the drop down, Table applicable to company as notified under schedule I of the companies Act, 2013.

Note: Name will not be automatically prefilled as there is no option to enter SRN of INC-1 manually.

√ Fill objects to be pursued by the company on its incorporation.

√ Mention the share capital of the company, No. of Equity Shares and its nominal value.

Note: In case of OPC, Authorised and Subscribed Capital needs to be same as per Schedule 6 of Table A of the Companies, Act, 2013

√ Facility of filing Subscribers details electronically is also available, but Subscribers has to append their Digital Signature.

√ Mention the details of the witness and Digital Signature of the Witness needs to mandatorily affix.

√ Click on Check form and file with INC-32 in linkage.

⇒ E-Article of Association:

Under Form INC-7: It is mandatory to attach Article of Association as per TABLE F, G, H, I, J defined under Companies Act, 2013 along with its Subscriber Sheet.

Under Form INC-29: It is mandatory to attach Article of Association as per TABLE F,G,H,I,J defined under Companies Act, 2013 along with its Subscriber Sheet.

Under Form INC-32: Now there is a facility to file memorandum electronically in E-form No. INC-34.

Following are the steps for filing of INC-34:

♦ If name is available then select from the drop down, Table applicable to company as notified under schedule I of the companies Act, 2013.

Note: Name will not be automatically prefilled as there is no option to enter SRN of INC-1 manually

♦ Definition of Private Company as per Section 2(68) of the Companies Act, 2013 is to be mentioned under the head of Definitions in Articles of Association.

♦ Director name(s) should be entered mandatorily under “Board of directors” and also mention different appointments, if any as a sub heading of article.

♦ Articles in addition to the standard table shall be mentioned in last blank box ‘Others’.

♦ Mention the details of subscribers in the prescribed format.

♦ Details of the subscribers shall match with form SPICE (INC-32) hence enter same DIN or PAN or Passport number as mentioned in that form for individual subscriber and/or authorised representative of body corporate subscriber

♦ Digital Signatures of all the subscribers is to be affixed

♦ After digitally signing by all the subscriber’s date of signing will automatically occur.

♦ Instead of Signature of witness affix the DSC of witness along with their details.

♦ Click on Check form button and file with INC-32 in linkage.

Hereunder the points to be kept in mind while incorporation of a Company under SPICE SCHEME:

• An option available for the company either they can file Form INC-1 for name availability or can go through Spice Route without filing Form INC-1.
• Only one name can be applied in INC-32 (Spice)
• Subscribers have to sign digitally instead of their physical Signatures.
• Now Witness Digital Signature is also mandatory.
• It is not mandatory to attach Id Proof and Address Proof of the Subscribers/ Directors if the same is having DIN.
• It is not required to file INC-22 with the Spice if the company is registered with correspondence address only.
• Maximum details of subscribers allowed through form SPICE (INC-32) is seven. In case of more subscribers, follow the normal incorporation procedure
• It is mandatory to mention name of First Directors and if one of the director is appointed as Managing Director or at other designation, mention the same.
• Subscribers Photograph is not required.
• The size of the Spice Form integrated with E-MOA and E-AOA is 6 MB.
• For the main objects the limit of the characters is upto 20,000 and for objects in furtherance limit is 100000 words.
• A foreign subscriber having a valid DIN can file newly integrated form Spice otherwise the same if not having DIN can file INC-7.
• No producer Companies can be incorporated through Spice.
• Refund fees will also be given if Rejected by CRC.

CONCLUSION:

It is a bold initiative by MCA as this is a combination of earlier two forms which are now phased out namely INC-7 and INC-29. This new form Spice provides speedy incorporation related services and if it will be properly implemented it will save lots of time of the Stakeholders across the world also.

Hope, this great effort by the government will give will give fruitful results in the hands of the Stakeholders.