The Ministry of Corporate Affairs (MCA) had brought forward a motion in 2017 to introduce the SPICe 1 Form INC-32, which is a Simplified Proforma for the purpose of incorporating companies electronically in pursuant to the Companies (Incorporation) Fourth Amendment Rules, 2016.
A company can be incorporated with a single application for reservation of name by using the SPICe Form. Furthermore, application for the allotment of a DIN 2 is also possible using the Form. The INC-32 is similar to the INC-29, whose purpose is also to fast-track the incorporation of companies in India. However, the Integrated Form INC-29 has been replaced with the SPICe Form and the INC-29 has been put out of practice by the MCA.
Having understood what the SPICe Form is in itself, it is necessary to understand the purpose of the Form. In simple terms, the Form deals with the application for reservation of name, incorporation of new companies, application for allotment of DIN, PAN or TAN. The Form is further supported by a vast range of documents which includes details of the subscribers, directors, Memorandum and Articles of Association. When the Form has been processed and deemed to be complete, the company would be legally registered and the CIN would be allocated.
Accordingly, the DINs also get issued to the relevant directors. A maximum of three directors is allowed to apply for their DINs using the SPICe Form itself at the time of incorporation. The remaining directors would have to go through the standard application process as codified by the MCA, and published as Rules in the Gazette of India. The Company would also be eligible for the allotment of a PAN and TAN.
It is evident by now that the SPICe Form can ensure the speedy incorporation of a company by integrating multiple steps into a single process. Given below are the types of companies that can be incorporated in India:
- Public Limited Company
- Private Limited Company
- Producer Company
- Section 8 Company
- One Person Company
The revisions as addressed in the title of this article is in light of the Central Government attempting further the ease of doing business in India. Some of the notable changes are as follows – 3
1. Zero Fees for Incorporation – To promote the ease of doing business, especially for younger businesses and startups, the MCA has announced that no fees will be required for incorporation for SPICe Forms, e-MoAs and e-AoAs. This saves young start-ups multiple thousand rupees, encouraging them to register their companies.
2. Introduction of Reserve Unique Name – The name reservation process has been simplified by the MCA by introducing the Reserve Unique Name Form (RUN). Prior to this, the company name had to be reserved in advance through an INC-1 form or directly through the incorporation application (SPICe Form). These have now been replaced by the RUN form.
3. Director Identification Number (DIN) – The initial procedure for the application of DIN was via the e-Form DIR 3 or at the time of incorporation through the SPICe Form itself. However, as per the new rules, the SPICe Form shall become the primary application portal, along with their proof of identity and address. Existing companies can still use the DIR-3 Form for the purpose of adding directors.
There have also been efforts to simplify the PAN and TAN allocation process for companies. Steps have also been taken to improve Corporate Governance in the country by amending the Companies (Amendment) Act of 2017 4 and the Insolvency and Bankruptcy Code. 5 There also been efforts to improve the status of commercial arbitration in the country on similar lines. These efforts have increased India’s position in the Global Ease of Doing Business List by 30 spots. 6
Hence, ever since the Start-up initiatives launched by the government, there have definitely been some concrete steps taken to not only make business easy for startups but also bring about mobility and vibrancy to the sector as a whole. The new amendments to the Company Rules in pursuant to the Companies Act, not only simplify the legal procedures businesses have to go through but also make the system free of any loopholes and limitations.
1. Simple Form for Incorporating Company – Ministry of Corporate Affairs
2.Director Identification Number (DIN) – Section 266A and 266B of Companies Act, 1956
3. Government announces company incorporation with zero fees: Yourstory Media – yourstory.com
4. The Companies (Amendment) Act, 2017 – Act No. 1 of 2018
5. Insolvency and Bankruptcy Code, 2016 – Act No. 31 of 2016
6. Economy Profile – India – doingbusiness.org
