The (not so) Rocket Science of Company Incorporation
by Kunwar Surya Pratap
Posted on Mon, 31 August, 2020, 04:08 PM IST
It is a thing of the past when the incorporation of a company was a sweating ordeal. But in the recent past, the Ministry of Corporate Affairs (‘MCA’) has simplified the process so as to ease the steps involved. But before you do anything related to the incorporation of your company, you might want to make a mandatory enlistment as a ‘Registered User’ on www.mca.gov.in. Post that, you shall be enabled to access the online features of the ministry.
The request gets processed through a form named SPICe-INC32 in addition to electronic Memorandum of Association i.e. eMoA in form INC-33 and electronic Articles of Association i.e. eAoA in form INC-34. This article would provide a brief insight to the readers on the incorporation process, the questions asked and the documentation involved. The structure of the write-up is organized in a way so that you may get a step by step guidance on the matter.
Digital Signature Certificate (DSC) – Rocket Fuel
Rocket fuel because you need it the most while taking off i.e., filling the requisite MCA forms. Since the majority of your documents would be processed online, you would be needing to attest them with a digital signature of yours. All the filings that would be done pursuant to your request of being registered as a company or an LLP would be submitted through a DSC of the person authorized to sign such documents. Popular Certifying Authorities for DSC include NIC, NSDL, etc. By following the requisite procedure, you shall be able to get your DSC within a day or two.
Post obtaining a digital signature, you need to associate your DSC with the MCA in the capacity of an Authorized Representative if you are first time director with no Director’s Identification Number (DIN). While the traditional process required the businesses to obtain a DIN before they could proceed with the incorporation, the newer process is an all in one package.
Think of a name! – Ideation
If you haven’t already thought of a name, then get one and rush to register it through the Reserve Unique Name (‘RUN’) option because the name availability is no less cumbersome than Gmail user IDs. Once you enter a name, the MCA portal would give you all the registered companies with similar names and hence you are asked for two name suggestions. The names proposed by you are sent for online approval to the Registrar who approves it within 2-3 days. Objections, if any, are recorded by him and you’re given one more chance to resubmit in lieu of the same processing fee.
However, to avoid rejections, one may refer to the Company Incorporation Rules, 2014 and check whether the name selected complies with the regulatory norms of the government.
Complete the Forms SPICe, AGiLE, eMoA, eAoA – Taking off
Start with downloading the forms from the portal along with the instructions available therewith. While you complete the SPICe form, keep in mind that the director’s consent shall be attached with it in DIR2 form format and declaration as per the INC-9 form. SPICe has a pretty exhaustive informational and documentary requirements, so here we try to sum up the documents that you shall be ready with:
For Details on Company:
- Dedicated E-mail Address
- Authorized and Paid-up Share Capital
- Correspondence and Registered Address
- Memorandum & Articles of Association
- Proof of Office Address
For Details on Directors:
- Identity Card
- E-mail Addresses & Phone Numbers
- Residential Proof
- Period of stay at the Present Address
- Educational Qualifications
In addition to that, you shall also upload the AGiLE form along with SPICe. Apart from other information that you need to fill in the AGiLE form, it would also ask for a letter of authorization which shall feature the name and signature of all the directors. The directions for the drafting of such a letter can be traced from that form itself. After completion, you may proceed to the download of E-Form MoA, AoA and condense the contents of your company’s memorandum and articles in those forms.
Upload the Forms – Ready to Scale New Heights
Login into the portal and upload the e-forms. The major point of difficulty while uploading them is adhering to the prescribed size limits and some unfortunate bugs on the website of MCA. Once submitted, you may pay the requisite stamp duty which varies as per the Authorized Share Capital you may decide for your business and other charges.
After the submission and payment and unless your application is not found defective, it would be processed ideally in 2-3 days by the ministry. Else, it is sent back within the same time frame for removal of defects. Once approved, you shall electronically receive your Certificate of Incorporation (CIN), the company’s Permanent Account Number (PAN), and individual DINs for all the directors.
End of Story – Separation Stage
Your interaction with MCA does not end there as a crucial part of the Company Incorporation process is filing the Commencement of Business i.e. Form 20A which is basically a declaration by the directors submitted once their business is started but within 180 days from the incorporation of the company. One shall attach evidence of the transaction where the directors have purchased their respective shares and paid the company on that behalf.
Please note that the procedure mentioned here is suggestive and for reference purposes only. The entire registration process is de facto regulated by the MCA and brings about several regulatory changes frequently. We at Caim are here to save you from the technicalities of law and financial services and thus we are amenable to incorporate your company as per your needs in the guidance of some of the best professionals of our country.
So, just start-up!