Technical Guide on Easy Incorporation of Companies through SPICE+: ICAI

Technical Guide on Easy Incorporation of Companies through SPICE+ 

Chapter 1 Introduction

Hand Book Philosophy

This is a quick guide for chartered accountants facilitating the incorporation of a company. All procedural formalities along with necessary inputs of law are provided. For elaborate understanding, it is advised to read provisions of law. Reference of section/rule is provided for ready reference.

A public limited company is incorporated for running large business undertakings, and producer company is constituted for the benefit of farmers. These companies call for a deeper understanding of the law and for the sake of brevity, procedures for incorporating these categories of companies have been dispensed with. Hence the focus is on the incorporation of the Company.

The client has taken the decision to incorporate a C O M P A N Y. He approaches a chartered accountant to do the needed. This booklet will be his Alexa or Siri for reaching the goal post to accomplishing ‘company incorporation’.

Related Topic:
New Form for Company Incorporation(SPICe+)

Company Incorporation

The Ministry of Corporate Affairs, Government of India with a view to meet its objective of Ease of Doing Business (EODB) in India, has simplified the process for incorporation of companies under the Companies Act, 2013.

As a part of PM’s initiative of EODB, the Ministry of Corporate Affairs (MCA) has brought in advanced integrated form SPICe+ (eForm-32) which facilitates the users’ ease in company incorporation. The eForm-32 has other added benefits wherein the DINs gets allotted to those proposed Directors who do not hold DIN and PAN, TAN, PF, and ESIC registration can also be obtained along with incorporation as a single procedure. The facility is available for simultaneous allotment of GST number and opening of Bank account.

SPICe+ is an integrated Web form offering 10 services by 3 Central Government Ministries & Departments. (Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance) and One State Government (Maharashtra), thereby saving as many procedures, time, and cost for Starting a Business in India. SPICe+ is part of various initiatives and commitment of the Government of India towards EODB which has made the incorporation of companies very easy and simple.

Using SPICe+ Form, the following types of companies can be incorporated in India: 

• Part I Company 
• Producer Company (only if 2 agricultural corporations are promoters, if there are minimum 10 promoters as applicable for individuals, then normal incorporation process has to be followed). 
• Section 8 Company (was not available in INC-29) 
• New Company – Public or Private or OPC

The substantive procedure governing the incorporation of a company is prescribed under Chapter II (section 3 to 22) of the Companies Act, 2013.

Before one goes to the formation of the company, one needs to know about the company and its types. 

1.1 What is a company

‘Company’ is an artificial juridical entity, separate from its members. It has perpetual succession. Under the Companies Act, 2013, “company” means a company incorporated under this Act or under any previous company law.

1.2 Types of Company

There are various types of companies like private, public, One Person Company, Section 8, Company, Small company, Nidhi company, Dormant Company, Government company, and Producer company, etc.

The companies may be classified into various classes on the following basis:

1. On the basis of liability

2. On the basis of members

3. On the basis of Control

4. On the basis of access to capital

5. Other Companies

1.3 Formation of a Company

A company may be formed for any lawful purpose by having a minimum number of persons as under:

(a) seven persons to form a public company; – Section 3(1)(a)

(b) two persons, to form a private company; – Section 3(1)(b) or

(c) one person, to form a One Person Company (OPC) i.e. a private company, – Section 3(1)(c).

by subscribing their names or his name to a memorandum and complying with the requirements of this Act in respect of registration.

A company formed as above may be either—

(a) a company limited by shares; or

(b) a company limited by guarantee; or

(c) an unlimited company.

Chapter 2 Highlights of Chapter II-Incorporation of Company and Matters Incidental Thereto

The procedure governing the incorporation of a company is prescribed under section 3 to 22 in Chapter II of the Companies Act, 2013. 

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