SPICE: Fast-track Company Registration
Over the past two years, the Ministry of Corporate Affairs has taken many steps to increase the pace of company registration. In a notification dated October 1 2016, it put forth the Fourth Amendment Rules, 2016, launching new e-forms that promise to significantly speed up the company registration process.
SPICe or Form-32 can help to incorporate a company with a single application for reservation of name, incorporation of new company and/or application for allotment of DIN. SPICe or Form-32 is very similar to Form INC-29, which also helps with fast track incorporation of a company in India. In this article, we review SPICe or Form INC-32 in detail.
Changes Introduced by MCA
Prior to May, 2015, the incorporation of companies required one to fill up several documents, such as the DIR – 3 for acquiring the DIN (Director identification number), INC- 1 for obtaining a name, Filling of INC – 7 for registering the company along with the scan copy of Memorandum and Articles of Association plus various declarations by directors and professionals, an INC – 22 for details regarding registered office and finally, Form – DIR 12 for appointing directors.
However, with effect from 01/05/2015, the Ministry of Corporate affairs brought forward one form – INC – 29 for incorporation of companies. This form included all the details to be filled in the five forms as mentioned earlier. Also, the process of getting an approval (if all filing done correctly) was reduced to as low as 48 hours. The Highlights of SPICE (INC 32, 33, 34) are follows:
- INC-32 can be filed even if you have applied for the name of the company through INC-1already. So this means you can either apply with one single name for the proposed company by filing INC 32 or you can also apply INC 1 and get a name reserved and then incorporate a company by SPICE INC – 32. This is a major difference between INC-29 and the new E-form.
- As stated earlier, the major breakthrough is the fact that SPICE provides e-filing of MOA and AOA through forms INC-33 and INC-34. The MOA can be copy pasted from your file and the AOA can be pre-drafted against the clauses given in the form INC-34. The whole process has been completely simplified.
- An applicant can also apply for Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) by form INC 32.
- Since MOA and AOA are to be filed digitally, the signatures of directors (digital signatures) can be affixed with INC-33 and INC-34.
Types of Companies which can be formed through this form
Form INC-32 can help to incorporate a company quickly in India by integrating many of the steps into a single process. Using SPICe Form INC-32, the following types of companies can be incorporated in India:
- Private Limited Company
- Public Limited Company
- One Person Comapny
- Section 8 Company
- Producer Company
The company can also be different categories like company limited by shares, company limited by guarantee or unlimited company.
Procedure for Filling SPICe – Form INC-32
This e-Form can be accessed by anybody and is available on the MCA website. INC 32 deals with the reservation of name, incorporation of a new company, allotment of DIN and related aspects. Procedurally, while filing it needs to be accompanied by the relevant supporting documents such as the Directors details and the charter documents. Once the form is processed by the Central Processing Unit of the Ministry of Corporate Affairs, the company and its director is said to have registered and shall be granted a CIN (Corporate Identity Number) and a DIN respectively. However, the form restricts the number of directors to a maximum of 3 per form. Documents that have to be furnished as a mandatory requirement are:
- Office Address Proof
- Declaration and Affidavit by the first subscribers and directors
- A copy of the utility bills of not later than two preceding months.
The Rules also mandate a declaration by a Professional who may either be a C.A, a C.S, Cost Accountant or an Advocate, stating that the information entered in the form is true and correct and must enter her/his membership/certificate number.
The MCA has taken an incredible initiative by introducing the SPICe system, especially INC-32. Though there do exist certain issues and challenges, nevertheless the purpose envisioned by MCA to set up a speedier system of incorporation seems to be possible and realizable due to this amendment. Only time will tell how effective this method is. MCA has been appreciated for its precise planning, continuous revamping for better efficiency and active role in the corporate regulation area. If utilised appropriately, INC-32 can definitely prove to be an important milestone for both existing and potential corporate players in this digital era.
Wirte-up by Ankur Singh