Company Incorporation Gets Easy with New SPICe; INC 29, INC 7 Phased Out!
For an entrepreneur, it is very important to not just come up with a unique idea but also to execute it an idiosyncratic manner. It is equally important for the Government to make sure that Entrepreneurs get a fair and equal chance to do so. An essential aspect of the same is the ease of setting and running up a business.
In a recent report by the World Bank, ‘Doing Business 2017: Equal opportunity for all’, India bagged 130th place out of 190 countries, one place higher than from the former year as the Economic Times reported.
“Prime Minister Narendra Modi had set a target for India to enter the top 50 in ease of doing business ranking in three years after breaking into top 100 this year.”
Many will call this ‘one-place-higher’ improvement a disappointment, however, the World Bank, in its report, has appreciated the collective effort of the Indian Government in the said sector. The Government continuing with their attempts to fulfil its target has recently introduced SPICe under Companies Fourth Amendment Rules 2016. So, let’s understand this new endeavour in detail.
1. What is SPICe?
SPICe, which stands for Simplified Performa for Incorporating Company electronically, is a rather similar concept to INC 29. In addition to what INC 29 did, primarily making the whole affair of establishing a company swift and effortless, SPICe provides a completely digital and simplified version of the same.
Sole, simplified and versatile form, as stated by a MCA press release, SPICe allows the filing of pre-drafted Memorandum of Association and Article of Association electronically. Thus, saving loads of time and un-complicating the whole exercise.
Major highlights of SPICe are as follows:-
• The form (INC 32) can be filed even after filing INC 1 which is used for obtaining the name of a company. You can do it in any which way, by directly filing INC 32 (applying for the company name approval directly in this form) or by filing INC 1 followed by INC 32.
• MoA and AoA, that is, the Memorandum of Association and the Article of Association is filed electronically by filing INC 33 and INC 34 under SPICe.
• Witnesses and Subscribers of MoA and AoA need only affix their digital signatures on the fore mentioned e-documents.
With the introduction of SPICe, INC 29 and INC 7 will be phased out. Any Private Limited Company, Public Limited Company, Producer Company, Section 8 Company, One Person Company can incorporate using SPICe.
2. How does it work?
The procedure, as is the nature of the form, pretty straightforward and easy. The following steps will take you through the whole incorporation process.
• Applying for the DSC. The directors of the concerned establishment need to apply for the Digital Signature Certificate.
• Further, the directors need to apply for DIN. A maximum of 3 directors can apply for the same while filing form INC 32 itself.
• Furthermore, all required forms, that is, INC 32, INC 33, and INC 34 are filled electronically.
• Finally, the forms are filed with the Ministry of Corporate Affairs (MCA) along with the required documents.
If found complete and error-free, the form is verified and your company is incorporated and a CIN is provided along with the issuance of DINs to the proposed directors. The Company’s ESIC, TAN, and PAN registration can also be obtained using SPICe.
Mandatory documents are also required to be submitted while filing the forms. These documents include address and identity proof, Affidavits and declarations (by subscribers and directors), NOCs, and other appropriate approval certificates as briefed in the form.
3. How will it help?
No one can deny the rapidness this form will bring in the business sector provided that it is implemented efficiently. The introduction will bring a substantial improvement in the market as well as the company as an individual.
An expeditious process is what one can call this. We can only look forward to its meticulous implementation and wait for the ease it is certainly going to bring in.
This article has been contributed by Anubhooti Jain who works at LegalRaasta, an online portal for GST Registration in India