Incorporation and Commencement of a Company in India

The very first step for forming a company is company incorporation. In an economy where competition is always at its peak, companies must follow a very streamlined and correct approach, be it the incorporation, registration, filing returns or claiming input tax credit.

Once the company is incorporated, there are some procedures the company needs to follow in order to commence business. Few legal formalities are to be followed before the company can start its business operations.

Following is the guide about the documents a company needs to obtain for incorporating a company in India:

(i) Send an Application for Incorporation of the company

The application for incorporation has to be made with the Registrar where the office is situated. The application for incorporation shall be filed in E-Form SPICe (INC-32) along with E-Form INC-33 (Memorandum of Association) and E-Form INC-34 (Articles of Association).

(a) INC-33 (E-MOA)

This form is linked with the SPICe (Simplified Proforma for Incorporating Company Electronically) INC-32 which is a form introduced by the Ministry of Corporate Affairs (MCA). A noticed under Schedule 1, the table of MOA applicable has to be selected by the company.

(b) INC-34 (AOA)

This form is linked with the SPICe INC-32 form. The table of AOA has to be selected and there is an option to alter or add an article in the form itself.

Introduction of SPICe-Form INC-32

SPICe Form INC-32, a simplified proforma introduced by the Ministry of Corporate Affairs for incorporating a company electronically is a single application which is basically used for reservation of the name, incorporation of the company and/or application for allotment of the Director Identification Number (DIN). INC-32 Form, just like Form INC-29 can help track instantly the incorporation of a company in India.

SPICe or Form INC-32 has, to a great extent simplified the process of incorporation of company in India. With the help of SPICe Form, a company can be incorporated within 1 or 2 days. Following are the type of companies which can be incorporated in India using the SPIC or INC-32 Form:

(a) Private Limited Company

(b) Public Limited Company

(c) One Person Company

(d) Section 8 Company

(e) Producer Company

Also a company can be of many categories which include company limited by shares, company limited by guarantee or unlimited company.

A brief guide about the Procedure for Filing the SPICe – Form INC-32

In order to file the INC-32 Form, the company has to provide documents like the details of the Directors, subscribers, affidavits, identity proof, address proof, MOA and AOA. It is then further forwarded to the MCA’s Central Processing Centre. If the application is approved, the company will get registered and the company will be given a Corporate Identity Number (CIN). In case, the proposed directors do not have a Director Identification Number (DIN), the director would be given a valid Director Identification Number (DIN). The INC-32 Form will be helpful in obtaining the PAN, TAN and ESIC registration.

Declaration by an Authorized Professional

The company incorporation form or the INC-32 form must be digitally signed by a professional Chartered Accountant, Cost Accountant, Advocate or a Company Secretary who must elucidate/declare that all the information presented in the form is true.

Following are the Important Documents Required for SPICe Form INC-32:

(1) Articles of Association and Memorandum of Association – The AOA and MOA are applicable and mandatory only if it is a Section 8 company or a company with foreign subscribers who does not have a Director Identification Number (DIN).

(2) Proof of office address.

(3) Proof of residential address and identity of the subscribers.

(4) Proof of residential address and identity of directors.

(5) First subscriber(s) and director(s) affidavit and declaration – mandatory in all cases.

(6) A No Objection Certificate (NOC) issued by the sole proprietor / partners / other other associates / existing company.

(7) A  copy of the utility bills not older than two months.

(8) A copy of approval only in case the proposed name contains any word(s) or expression(s) that requires the Central Government approval.

(9) It is mandatory to attach the trademark certificate or trademark application copy if the proposed name is based on a registered trademark or if it a subject matter of an application pending for registration under the Trademarks Act.

The procedures for Incorporating a Company are as follows:

1. A new company has to obtain a Director Identification Number (DIN) for the proposed directors.
2. Post that, the sole promoter/director of the company must obtain a Digital Signature Certificate (DSC).
3. Once the Digital Signature Certificate (DSC) is obtained, the company has to file a proposed company name with the Registrar of Companies for approval.
4. The company has to print the Memorandum of Association and Articles of Association.
5. The Stamp duties needs to be paid online.
6. All company incorporation forms and relevant documents must be filed by the company along with the Memorandum of Association (MOA) and Articles of Association (AOA).
7. After this, the Company Incorporation Certificate has to be obtained.
8. Now the company has to request and obtain the company incorporation certificate in order to start its operations.

The certificate of commencement of business is required to be obtained by the registrar of companies. This document acts as an evidence for the company to commence its business.

The next step after successful company incorporation is GST registration. In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.