Company Incorporation Under the Companies Act, 2013

The Companies Act, 2013 governs the entire process of company incorporation in India, including the issuance of the company registration certificate. A business in India cannot legally operate without first obtaining this registration certificate from the Registrar of Companies (ROC). The ROC will issue the certificate once the company has met all the necessary requirements outlined in the Act.

Company founders must apply for registration through the Ministry of Corporate Affairs (MCA) portal. The MCA introduced a new form, SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus), on February 23, 2020, which is mandatory for all companies incorporated after this date.

Prerequisites for Company Incorporation

Before submitting the incorporation form, certain prerequisites must be met:

1. Digital Signature Certificate (DSC):
Since the entire registration process is conducted online, a Digital Signature Certificate (DSC) is required to file the necessary forms on the MCA website. All proposed directors must obtain a DSC, as it is also required for signing the e-Memorandum of Association (e-MOA) and e-Articles of Association (e-AOA).

2. Selection of Name:
The proposed directors must select a unique name for the company. The ROC will reject any name that is identical or similar to an existing company’s name or a registered trademark. It’s advisable to conduct a trademark search before finalizing the name. The name should also comply with the guidelines set out in the Company (Incorporation) Rules, 2014. The name reservation is done through Part-A of the SPICe+ form, and if the proposed name is rejected, a new name must be submitted for approval.

3. Members and Directors:

A One Person Company (OPC) requires a minimum of one member and one director.
A private limited company must have at least two members and two directors.
A public limited company requires at least seven members and three directors.

Process for Company Incorporation Under the Companies Act, 2013

The steps to incorporate a company using the SPICe+ form are as follows:

1. Login to MCA:
A company promoter or proposed director must first create an account on the MCA website. After creating an account, the applicant can login and access the SPICe+ form, as well as other required compliance forms after the company is registered.

Steps to create an MCA account:

Click on ‘Sign In/Sign Up’ on the homepage, then select ‘Register.’
Choose ‘Business User’ as the category, select the appropriate user role, and enter your PAN number.
Complete the personal, contact, and login details, then submit. An OTP will be sent to your mobile number for verification.
After verification, you can log in to the MCA portal.

2. Fill Part-A of the SPICe+ Form:
After logging in, select the ‘SPICe+’ option under ‘Company Services’ and choose ‘New Application.’ In Part-A, you will need to reserve the company name by selecting the type, class, category, and sub-category of the company, as well as the main industrial activity. Once you submit this information, the name reservation request will be processed.

If you opt to reserve the name first and complete Part-B later, you can propose up to two names. The approved name will be reserved for 20 days, during which you must complete Part-B. If Part-B is not completed within this time frame, the entire application will be rejected, requiring you to re-apply for name reservation.

3. Fill Part-B of the SPICe+ Form:
In Part-B, you will provide details such as:

Nature of the business
Authorized and paid-up capital
Registered office address
Email ID
Details of directors and subscribers
Shares held by subscribers
PAN and TAN information
Business/profession code
Professional details of any associated CAs, CMAs, CSs, or Advocates

Part-B allows you to apply for various registrations, including DIN (Director Identification Number), PAN, and TAN.

4. Fill AGILE-PRO Form:
The AGILE-PRO-S form is required for registering with the Employee State Insurance Corporation (ESIC), obtaining a GSTIN, registering with the Employees’ Provident Fund Organisation (EPFO), opening a bank account, and, where applicable, registering for Professional Tax and Shops and Establishment.

5. Upload SPICe+ Form:
After completing Part-B, upload the necessary documents and perform a ‘pre-scrutiny’ check. Once validated, submit the form. After submission, download the PDF to affix the DSC and upload it to the MCA portal. Upon making the required fee payment, the ROC will process the form and issue the Certificate of Registration if all information is correct.

Documents Required for SPICe+ Form

The following documents must be attached to the SPICe+ form:

e-MOA and e-AOA
Declaration by the first directors and subscribers
Proof of office address
Resolution passed by the promoter company
Utility bills
Interests of first directors in other entities
Proof of identity and address for subscribers and the nominee (if applicable)
Certificate of incorporation for any foreign body corporate (if applicable)
Optional attachments

Documents required for AGILE-PRO include:

Proof of principal place of business
Proof of appointment of the authorized signatory for GSTIN
Proof of identity and address for opening a bank account
Specimen signature of the authorized signatory for EPFO

Precautions When Filing the Incorporation Application

Keep the following points in mind when filing the SPICe+ form:

Ensure the incorporation form is digitally signed by both the director and a professional.
Validate the DSCs.
Ensure proposed directors are not disqualified under the Companies Act, 2013.
Keep the size of attached documents within the prescribed limits and ensure they are legible.
All document copies should be self-attested by the respective directors.

Commencement of Business

A company with share capital cannot commence business or exercise borrowing powers unless:

The director files a declaration in Form INC-20A with the ROC within 180 days of incorporation, confirming that every subscriber has paid for their shares.
The company verifies its registered office with the ROC in Form INC-22 within 30 days of incorporation.

Company founders or promoters must submit the SPICe+ form to the ROC to legally establish the company. Once the form is submitted online, the ROC will review the application and supporting documents before issuing the Certificate of Registration. For any queries, Contact us.

FAQs related to Company Incorporation under the Companies Act, 2013:

1. What is Company Incorporation under the Companies Act, 2013?
Company incorporation is the legal process of registering a company under the Companies Act, 2013, which allows it to become a separate legal entity from its owners.

2. What are the types of companies that can be incorporated under the Companies Act, 2013?
You can incorporate a Private Limited Company, Public Limited Company, One Person Company (OPC), and Limited Liability Partnership (LLP) under the Act.

3. What documents are required for company incorporation?
Key documents include the Director Identification Number (DIN), Digital Signature Certificate (DSC), Memorandum of Association (MoA), and Articles of Association (AoA), along with identity and address proofs of directors and shareholders.

4. How long does the incorporation process take?
Typically, company incorporation can take 7-15 days depending on the submission of documents and approval by the Registrar of Companies (RoC).

5. Can foreign nationals incorporate a company in India under the Companies Act, 2013?
Yes, foreign nationals can incorporate a company in India, subject to compliance with Foreign Direct Investment (FDI) regulations and other requirements.

6. What is the minimum capital requirement for incorporating a company?
The Companies Act, 2013 has done away with the minimum paid-up capital requirement. There is no mandatory minimum capital for incorporating a private or public limited company.

7. What are the benefits of incorporating a company under the Companies Act, 2013?
Benefits include limited liability protection, separate legal entity status, ability to raise funds, perpetual succession, and enhanced credibility in the business market.

8. Is there any post-incorporation compliance required?
Yes, after incorporation, companies need to comply with annual filings, maintain statutory registers, hold board and general meetings, and file taxes under the applicable laws.

9. Can I convert my partnership firm into a company under the Companies Act, 2013?
Yes, a partnership firm can be converted into a company by following the provisions mentioned under the Companies Act, 2013.