The Ministry of corporate affairs in its courageous bearing notified on October 1, 2016 the Companies (Incorporation) Fourth Amendment Rules, 2016 amending the Companies (Incorporation) Rules, 2014 with effect from October 1, 2016. The amending rules introduced the Simplified Proforma for Incorporating a company Electronically (SPICe) as a part of the initiative in Government Process Re-engineering (GPR) on October 2, 2016. SPICe provides for a digital and a considerably simplified substitute of Form INC 29 newly packaged to incorporate a company in India with much ease. The notification declares Form INC 32 as the digital auxiliary of Form INC 29. Under the SPICe program a pre drafted Memorandum of Association and Articles of Association can be filed much economically and effectively with ease of doing business.
- Due to the introduced change the entire process of incorporation of Part I companies, producer company, Section 8 company, new companies (that includes public companies, private companies, and one person companies) is simplified into one single form that would take about 48 hours for approval.
- Form INC 32 facilitates much more than INC 29 as it enables filing of Memorandum of Association electronically.
- Form INC 32 can be filed even after filing INC 1 which is used for obtaining name of a company. This facility was not provided by INC 29, one can now also obtain the name of the proposed company by filing INC 32.
- The memorandum of Association and the Articles of Association of the company to be incorporated can be filed electronically through forms INC 33 and INC 34 respectively under SPICe. Further, pre drafted clauses of AoA can be submitted and witnesses to the Memorandum and the Articles of Association can affix their Digital Signatures on the e-documents.
- MCA has also provided a procedure for conversion of a company limited by guarantee into a company limited by shares.
- The inclination to file for compliances and meeting regulatory requirements is being revamped and there is a paradigm shift from manual to digital media today, it does not come as surprise that INC 29 and INC 7 will eventually be phased out in future and any company including private limited company, public limited company, section 8 company, one person company will have to resort to incorporation compliances using SPICe. Furthermore, it is important to note that directors of the concern will have to apply for digital signature certificates and DIN.
Earlier the incorporation procedure was facilitated by the filing of forms such as INC 7, DIR 12, and INC 22 manually. The same was substituted by the melting pot Form INC 29. The only and probably the most significant difference in the digital process of filing for incorporation through Form INC 32 is the resultant efficiency in the process. However, it does not make any relaxation in terms of attachment of necessary documents. All the forms are required to be filed with requisite attachments such as Address proof, identity proof, affidavits and declarations by subscribers and directors, along with required NOCs and approval certificates as enumerated in the respective form. If found complete and correct, the forms are verified, the company gets incorporated and a Corporate Identification Number (CIN) is issued along with the DIN to the proposed directors.