/ Company incorporation in India

Incorporating a private limited company with Indian directors

Incorporating a company in India has become much easier now. On the 69th republic day, the government has brought various changes making it easier to set up a private limited company in India. Now a company can be incorporated using just 1 E-Form, SPICe (INC-32).

A single window form: SPICe (INC-32)

It is a single application for

  • reservation of name,
  • incorporation of a new company and/or
  • application for allotment of DIN and/or
  • application for PAN and TAN

It is accompanied by supporting forms SPICe_AoA and SPICe_MoA.

Once the e-Form is processed and found complete, company would be registered and CIN would be allocated. DINs get issued to the proposed Directors who do not have a valid DIN and PAN and TAN would also get issued to the Company.

Important points:

  • Maximum three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company.
  • No minimum paid-up capital requirements apply for incorporating a company
  • Maximum number of members excluding proposed employee(s) should not be greater than 200 in case of a private company.
  • Number of members excluding proposed employee(s) should be greater than or equal to two in case of Private Company (other than Part I company) and seven in case of Part I company/ public company.
  • The company can establish its place of registered office on or from the fifteenth day of its incorporation. Till then the correspondence address shall be the mailing address for company.
  • The correspondence address should be in the same state where company is willing to have its registered office.
  • Total number of first subscribers are restricted to seven, considering possibility of affixing maximum DSCs in form SPICe MOA (INC-33) and form SPICe AOA (INC-34).
  • Directors not having DIN cannot be more than 3 in number.

Name approval

There are 2 ways to register a company’s name

  1. Directly getting the name approved through SPICe (INC-32)
  2. Reserve Unique Name (RUN)

A unique name should be chosen for the company considering Section 4(4) of the Companies Act, 2013 and Rule 8 & 9 of Companies (Incorporation) Rules, 2014

The illustrative list of names based on the type of company is as follows:

In case of an one person company – ABC (OPC) Private Limited

In case of a private limited company (other than producer company) – ABC Private Limited

In case of a private limited company (Producer company) – ABC Producer Company Limited

In case of a public limited company – ABC Limited

In case of an unlimited liability private company – ABC Private Unlimited

In case of an unlimited liability pubic company – ABC Unlimited

If the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act, then approval shall be attached of such owner of the registered trademark or the applicant of such trade mark for which application for registration is pending.

A name reserved by RUN remains reserved for 20 days from the date of approval.

TAN Number:

Under the new SPICe form, TAN would be allocated along with the PAN. Allocating TAN with PAN would reduce another compliance related registration a company has to obtain at a later date and ensure that all companies are ready to deduct & remit tax collected at source from day one.

Conclusion:

SPICe Form INC-32 is surely an improvised version of e-Form-29 wherein a lot of changes have been made to accommodate the interest of the stakeholders. By introducing a single window form, there has been a drastic reduction in the timelines. However, due to some limitations, it might not be feasible like limited number of subscribers, affixing of DSC of subscribers.

With the hope that the regulators might address the inherent limitations that are being observed in the current procedure and make the necessary changes, we can conclude that stakeholders will be more benefited in all perspective.

AJSH has an expertise company registration and incorporation and has been assisting clients for 10 years.

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