PROCESS & PROVISIONS OF

INCORPORATION OF COMPANY

(PRIVATE LIMITED)

Short Summary:

Transitioning from the Companies Act 1956 to the Companies Act 2013 is akin to relocating from your previous residence to an altogether new one. The provisions have been updated with the new Act, 2013. As a business consultant, I understand the importance of staying up to date with the latest regulations. The Central Government has made several amendments in response to the new act through notifications and other means. Several amendments have been made in previous years regarding the incorporation of new companies, just like in this case.

ü  Analogous Law:

This section corresponds to Section 33 (Registration of memorandum and articles) of the 1956 Act.

ü  Applicable Section:

Section 7 and 12 of Companies Act, 2013.

ü  Applicable Rule(s)

Rule 8 to 18, 24, 25 and 38 of the Companies (Incorporation) Rules, 2014

NOTE (Some Important points):

     i.       By Companies (Amendment) Act, 2017 has replaced ‘affidavit’ under section and rules of Incorporation with the word ‘a declaration’. There is no need to prepare any affidavit for the Incorporation of Company.

   ii.        There are not any limits on the minimum authorized share capital for incorporating a company. It is possible to incorporate a company with each subscriber holding Rs. 1 share capital.

  iii.       Having a DIN is not necessary during the incorporation process for first directors.

  iv.       Maximum 3 DIN can be applied through Incorporation form.

   v.        Physical MOA and AOA are redundant. Electronic MOA and AOA will be generated for incorporation. If all the subscribers are residents of India or the number of subscribers is less than 7, then physical MOA and AOA shall be applicable.

  vi.       There is no requirement for putting any professional declaration in INC-8.

vii.        It is essential for all subscribers to possess a Digital Signature Certificate (DSC) when submitting Incorporation forms to ROC-CRC. As the DSC of subscribers are required to affix on subscriber sheet of MOA and AOA.

viii.        As a promoter, you have the option to submit an application for Incorporation while also reserving a name through Spice Part B.

  ix.       GST, EPFO, ESIC, Professional Tax Registration and opening of Bank account can be done through Agile Pro S vide GST 128(E) dated 18^th February 2020 by rule 38A amended by (Amendment) Rules, 2020.

   x.        INC-9 – Declaration by first subscribers and directors shall be auto generated after submission of Spice Part B. There is no need to prepare INC -9 on paper. However, if a person does not have PAN or DIN then need to prepare the same on plain paper.

  xi.       A Private Company needs to have two directors whereas a public company need to have three directors, Minimum member to form a private company is two, and maximum is two hundred, whereas a public company need to have minimum of seven members.

xii.        In case of Companies incorporated, with effect from the 26^th day of January 2018, with a nominal capital of less than or equal to rupees 15 Lakhs on in respect of companies not having a share capital whose number of member as stated in the articles of associations does not exceed twenty, fee on Spice+ shall not be applicable.

For Incorporation of Company, it is required to file form SPICE+ (Simplified Proforma for Incorporation of company electronically)

Spice+ would have two parts viz.:

A.  Part A – Name Approval

STEP – I:

A.  Login on MCA Website

An application for reservation of name shall be made through the Web Service available at www.mca.gov.in by using web service on MCA V3 Portal through web form Spice+ Part A (Simplified Proforma for Incorporating Company Electronically).

Applicants have to login into their account on MCA Website (Business User or Register User). (Pre-existing users can use earlier account or new users have to create a new account.)

Information Required: At the time of filing of Name application, the applicant must have the following information. (Desired Name, Desired Object along with Object Code). Two proposed name can be apply altogether.

Details required to be mentioned in form for Name Application:

(i)   Class of Company (whether Private, Public, OPC)

(ii)  Category of Company (whether Company limited by shares, limited by Guarantee or unlimited)

(iii)Sub-category Union Government, State Government, Non-Government Company, Subsidiary of Company incorporated outside India)

(iv) Main Division of Industrial Activity (enter number belonging to Industrial Activity)

(v)  Description of main division

(vi)  Particulars of Proposed or Approved Name.

(User has to enter the name he wants to reserve, for incorporation of a new company. Users are requested to ensure that the proposed name selected does not contain any word which is prohibited under Section 4(2) & (3) of the Companies Act, 2013 read with Rule 8 of the Companies (Incorporation) Rules, 2014. Users are also requested to read and understand Rule 8 of the Companies (Incorporation) Rules, 2014 in respect of any proposed name before applying for the same.

(i)  Choose File (Any attachment)

Important Points (for Name Application):

     i.       Fees for Name application is Rs. 1000.

   ii.        [1]If an application came for resubmission, applicant have to resubmit the application within 15 days with ratification of the defects, if any.

  iii.       After approval of name, the name shall be reserved for 20 days from the date of approval.

  iv.       If the applicant wants, then by payment of extra fees they can extend the period of Name from 20 Days to 60 days. (Fees Rs. 1000 for the first 20 days extension up to 40 days and Rs. 2000 for next 20 days extension up to 60 days)

   v.        Applicants have to further apply for Incorporation of Company through Spice Part B form from the same MCA ID on which Name has been reserved.

  vi.       For the Name application there is no requirement of any DIN or DSC of applicant.

STEP – II:

Once the name is approved, the applicant must move forward with the Company Incorporation process within 20 days of name approval (unless an extension is requested by paying an additional fee). For Incorporation of Company as mentioned above, applicant have to file Spice+ Part B on MCA Website.

Before start to fill Spice+ Part – B applicant should arrange the following documents and prepare the following documents:

a)   Preparation of Documents for Incorporation of Company:

Once the name is approved, the applicant must prepare the documents listed below.

i.        Digital Signature of all the Subscribers and Directors.

If they do not have Digital Signature, then immediately apply for the same.

ii.        Proof of registered office address (Conveyance/ Lease deed/ Rent Agreement etc. along with rent receipts), if any.

iii.        Copy of the utility bill of registered office. It should not be older than two months. (Electricity Bill, Water Bill, Gast Bill, Telephone Bill etc.)

iv.        NOC from the owner of the property. ₍on plain paper and NOC from the person whose name mentioned on utility bill₎

v.        In case of subscribers/ Director does not have a DIN, it is mandatory to attach Proof of identity and residential address of the subscribers/ Directors as mentioned below i.e.

·      Self-attested copy of PAN

·      Voter Card/ Driving License/ Passport; any one

·      Bank Statement/ Utility Bill; anyone (not older than two month0

vi.        Copy of Photograph of two person authorized for ESIC, EPFO and Bank account documentation. (This person can be proposed directors or any outsider).

b)   Fill the Information in Spice+ Part B:

Once all the above-mentioned documents is available. Applicant has to fill the information in the e-form “Spice+ part B”. List of Information required from Subscribers/ Directors are given at the end of the article.

Traits of Spice+ Part B form:

i.        Web based: This form is web-based. All the necessary information can be filled out online. Once the information form is completed, you can download it to attach your DSC.

ii.        Online Information: This form once online information filed will be save there only and can be access in dashboard of the Log in ID.

iii.        Fill details of PAN & TAN:

It is mandatory to mention the details of PAN & TAN in the Incorporation Form Spice+ Part B. Link to find out of Area Code to file PAN & TAN are given in Help Kit of SPICE+.

iv.        Details of Registered Office:

The applicant must mention the address of the registered office in this form. Applicants have to mention the Latitude and Longitude of the registered office address.

Note: If the applicant has not yet determined the registered office address at the time of incorporation, it is in accordance with the Act. It is important to include the correspondence address in Spice Part B and submit INC 22 within 30 days of incorporating the company with the registered office address.

v.        Generation of Linked Forms: After complete filing of information in web-based form, applicant have to save the form. After  that applicant have to click on mini dashboard in their login ID to fill other forms.

 c)   Preparation of MOA & AOA (Electronic or Physical):

After proper filing of SPICE+ Part B form applicant has to move on filling of information in INC-33 (e-MOA) and INC-34 (e-AOA) form Dashboard Link. All the information which are common in PART-B and MOA/AOA shall be auto fill in MOA and AOA.

§  MOA and AOA are also web-based forms which shall be available on dashboard in particular link.

§  After opening of web-based form fill all the information in the MOA/ AOA as per requirement of Table A to J of Schedule I.

§  After completely filing of the MOA/ AOA

d)   Fill details of GST, EPFO, ESIC, BANK Account in AGILE PRO-S:

After proper filing of SPICE+ Part B, e-Moa, e-AOA form, applicant has to move on to filling out information in the AGILE PRO form Dashboard Link. All the information which are common in PART-B and AGILE PRO shall be auto fill in AGILE Pro. It is also web based form.

§  GST: If Company wants to apply for GST it has to select YES in the form and fill the information in the form.

§  EPFO/ ESIC: It is mandatory to apply for ESIC and EPFO.

As per their concerned department company not required to file return till the date applicability of provisions of same on such company, if company has applied for Dormant Status on their website.

§  Bank Account: It is mandatory to open a bank account through this form. The bank account branch shall be assigned according to nearest branch to the Registered office of the Company.

NOTE (Some Important points):

 i.        The company must mention the main business activity in this form also.

ii.        The company must give the details of two authorized people to deal with ESIC, EPFO and Bank account formalities (this person can be any one of the directors or outsiders also).

iii.        Need to attach a photograph of both authorized persons.

iv.        Need to mention mobile no and email ID of an authorized person.

v.        OTP shall be generated on Mobile and Mail ID of authorized person.

vi.        Need to mention the jurisdiction of Police Station.

vii.        Details of ESIC and EPFO office as per jurisdiction of registered office.

viii.        The person who is signing Spice Part B Digitally the same person shall affix his Digitals on Agile Pro.

e)   Fill details of INC-9:

INC-9 shall also be generated web-based and need affixation of Digital Signature of Directors/ subscribers on the same. It shall not be generated web-based in two situations when at least one directors/ subscriber not having DIN and PAN both or no. of directors + subscribers are more than 20.

f)    Download PDF of all the web-based forms-:

Once the user clicks on the save button for all the forms such as Spice Part B, INC 33, INC 34, Agile Pro, and INC-9, they will need to download these forms in order to obtain digital signatures from the directors, subscribers, and professionals.

g)   Filing of forms with MCA-:

Once all the above-mentioned forms are completed by the applicant and have been digitally signed, they can be uploaded as linked forms on the MCA website. The payment for these forms can then be made.

h)   Certificate of Incorporation-:

POINTS TO REMEMBER WHILE FILLING THE INFORMATION IN FORM:

 i.        Maximum details of subscribers are SEVEN (7). In case of more subscribers, physically signed MOA & AOA shall be attached in the Form.

ii.        Maximum details of  TWENTY (20) directors can be mention in Incorporation form..

iii.        Maximum THREE (3) directors are allowed for filing application of allotment of DIN while incorporating a Company.

iv.        Applicant can apply the Name also in this form.

v.        By affixation of DSC of the subscriber on the INC-33 (e-moa) date of signing will be appear automatically by the form.

vi.        Applying for PAN/TAN/EPFO/ESIC/Bank Account will be compulsory for all fresh incorporation applications filed in the new version of the SPICe+ Part B form.

vii.        Companies can apply for GST, also through AGILE PRO form.

FEATURES - SINGLE WINDOW FORM:

In the past, individuals had to go through a series of steps to incorporate a company, including applying for a DIN, getting approval for the name availability, filling out a separate form for the first director, providing a registered office address, and obtaining PAN and TAN numbers. However, this form serves as a convenient and streamlined process for incorporating a company.

This form can be used for the following purposes:

Ñ     Application of DIN (upto 3 Directors)

Ñ     Application for Availability of Name

Ñ     No need to file separate form for first Director (DIR-12)

Ñ     No need to file separate form for address of registered office (INC-22)

Ñ     No need to file separate form for PAN & TAN

QUICK QUESTION – SPICE+

i.        How to file the SPICe+ form in case of more than 7 subscribers in the Company?

ii.        Whether e-MOA & AOA can be filed in case of MOA & AOA is signed by a person at a place outside of India?

iii.        Whether Companies are required to make payment of Stamp Duty in case of incorporation of Company with authorized Capital of Rs. 15 Lakh or below?

iv.        How many DIN can be applied through SPICE+ Form?

Maximum 3 (Three) DIN can be applied through SPICE+ form.

v.        Whether there is need to file any separate form for PAN & TAN?

1.   Obtain engagement letter from subscriber: - As per certification in Spice+ Part B, a professional declares that he has been engaged for the purpose of certification. Therefore, it is advisable to obtain an engagement letter.

2.   Verification of original records pertaining to registered office: - As per certification in Spice+ Part B, a professional declares that he has verified all the particulars(including attachments) from original records.

3.   Ensure all attachments are clear enough to read: - As per certification Spice+ Part B, a professional declares that all attachments are completely and legibly attached.

4.   Ensure registered office of the company is functioning for the business purposes of the company: - - As per certification in Spice+ Part B, a professional declares that he has personally visited the registered office.

5.   Take a declaration to the effect that all the original documents have been handed over after incorporation. Since as per section 7(4) copies all documents/information as originally filed should be preserved at the registered office of the company, therefore a professional should take a declaration while handing over the incorporation documents.

6.   MCA Circular 10/2014: - According to this circular ROC/RD in case of omission of material fact or submission of false/incomplete/ misleading information can after giving opportunity to explain refer the matter toe-governance division of MCA, which in turn may initiate proceedings under section 447 and/or ask the respective professional institute to take requisite disciplinary action.

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com). 

Disclaimer: The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information. 

IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OFOR IN CONNECTION WITH THE USE OF THE INFORMATION