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Simplified Incorporation And Documentation Procedure

Simplified Incorporation And Documentation Procedure

Ministry of Corporate Affairs (MCA) has further simplified the ease of doing business in India by introducing SPICe forms to further digitize the company registration process. The form INC 29 was originally used to incorporate companies within a couple of days. Though this form simplified the process of incorporation, key stakeholders and professionals felt that this was a risky form because a rejection in a particular section or subsection would result in the entire form being rejected. It was because of this most promoters/founders (about 65%) used the INC 7 Form to file for incorporation. To fix this drawback, the MCA created Simplified Performa for Incorporating a Company Electronically or SPICe Form.

SPICe Forms

Simplified Performa for Incorporating a Company Electronically (SPICe) form is a single multi-purpose form that handles multiple applications such as reservation of the company name, allotment/application for Director Identification Number (DIN), incorporation of a company, etc. This was launched by the MCA to fast track the Incorporation process for companies in India.

The form INC 32 is similar to INC 29 because it helps fast track the incorporation of a company in India with the only exception, the former form has a provision for name approval, thereby assuring the name, while the latter has no such provision.

How to Incorporate a Company?

There are two ways to incorporate a company, namely:

  1. INC 7, DIR 12 and INC 22
  2. INC 32 or SPICe Form (replacing INC 29)

Types Of Companies That Can Apply Through SPICe

  1. Part 1 Company
  2. Producer Company
  3. Section 8 Company
  4. New Company – One Person Company (OPC), Private or Public Limited Company.

Step-By-Step Process

I. File INC Form 32

INC 32 is the eform used in electronic filing of the Memorandum of Association (MOA) and the Articles of Association (AOA). The Standard format to be followed is Form INC 33 (for MOA) and INC 34 (for AOA). Previously, a company applying for incorporation would use their own format and sent to the Registrar of Companies individually, but since the introduction of SPICe Form, one needs to apply for AOA and MOA with the standard format prescribed. This creates less confusion and a narrow scope for making errors.

Based on the type of company, the following standard templates are used:

Sr.No Type Of Company AOA MOA
1 Company Limited by Shares Table A Table F
2 Company Limited By Guarantee (not having share capital) Table B Table H
3 Company Limited By Guarantee (having share capital) Table C Table G
4 Unlimited Company (not having share capital) Table D Table J
5 Unlimited Company (having share capital) Table E Table I

II. INC 1 or Name Change
Only a single name for the company can be proposed in a form.

III. File DIN
DIN is automatically allocated to directors that do not have a DIN.

IV. Digital Signature Certificate (DSC) is an essential step in this process. Without a DSC, a company cannot file for incorporation through SPICe Form. The Directors, witness/es and a professional will be required to use their DSC on the SPICe Form. The limit is 7 subscribers and 1 witness per incorporation, though accommodation for certain cases that require more than 7 subscribers has been undertaken.

V. Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN) and Employee State Insurance Corporation (ESIC) registration can be done in a single step.

VI. Documents Required

  • Memorandum Of Association
  • Articles Of Association
  • A declaration and affidavit must be filed by the first subscriber/s and director/s.
  • Proof of Office Agreement – Rental Agreement, conveyance, lease deed and rent receipts.
  • A copy of Utility bills lesser than 2 months – phone bill, electricity bill, etc.
  • NOC from the sole proprietor, partners, other associates, etc.
  • Proof of identity and residential address of the subscribers and directors.

VII. Share Capital
The minimum share capital (authorized and subscribed) for a One Person company (OPC) is INR 1, for a Private company INR 2 and for a Public Limited Company is INR 7.

VIII. Declaration by a Professional
The DSC of a professional (Company Secretary, Chartered Accountant, advocate, Cost Accountant) along with the professional’s membership and certificate number is required to file SPICe Form (a declaration that all information provided is accurate and true).

IX. The Form is then processed at the Registrar’s office.

Conclusion

SPICe Form was introduced to replace eForm 29. While drafting the SPICe form, accommodation was made to changes that benefited the stakeholders by reducing timelines and multiplicity of several forms in the process of Incorporation. SPICe will become the standard form and format for all incorporation related purposes.

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Discussion On Digitisation Of The Indian Legal System

discussion-on-digitisation-of-the-indian-legal-system

Digitization surely acts as a catalyst for most of the flourished fields to prosper further. With the digital age revolutionizing all domains including law & legal services, it is important to study its impact within our fraternity. The foregoing Indian Legal System laid more emphasis on paperwork but less on technology while the current system strives to digitize the entire legal system.

LegalDesk.com, in collaboration with iSPIRT, hosted a Conference on ‘The Digitisation of The Indian Legal System’ on Wednesday, 9th November. The event was set up at KSCA auditorium in Bangalore.

In the presence of dignitaries including Shri Prabhuling K. Navadgi Additional Solicitor General of India, Shri Kishore Mandyam Co-Founder at DAKSH Society India and Shri Sanjay Khan Nagra, Policy Expert, iSPIRT Foundation, the conference drew a huge crowd which included technology & legal professionals, law students, and the media.

Despite all the hype around digitisation in India, legal sector still lags behind other sectors. There are thousands of courts, over a million advocates, lakhs of ongoing cases and lakhs of pending cases, an ever growing population, but above all, there is a lack of information made available to the concerned parties which should be addressed. There is a pressing need to speed up the legal sector which makes it mandatory to embark on digitisation of the system.

Only scanning documents isn’t digitisation, but the emphasis should be to make information available to future generations, said Mr. Kishore Mandyam while speaking at the conference. He pointed out the need for reducing pendency of cases in the Courts. He shared some valuable insights about the technology reforms needed for the Indian Judiciary and hypothesized that Government forms have to be made available online and every single document associated with legal formalities can be made electronically available, thus promoting paperless functioning of legal system. Using case management softwares to manage cases would be beneficial, he added.

During his speech, Mandyam compared stats pertinent to legal system of India with that of the United States. He pointed out that, in India, there are 24 High Courts, 21,000-odd Lower Court Judges, while there are 50 State Supreme Courts and 37,000-odd Lower Court Judges in the U.S. While an average of 6,20,000 new cases are being added every month in India, around 7,20,000 cases are being disposed of. And currently, there are around 2.3 Crore cases pending. But in the U.S., for every 6.5 MN cases added/month, around 6.2 MN cases are being disposed, which leads to a significantly small number of cases pending which haven’t been disposed of for decades. So, at this speed, in India, it would take around 19 years to clear the pending cases, which is why it is highly important to speed up the entire system. Also, the number of average cases disposed per judge is significantly higher in U.S. compared to the same in India. Besides speeding up the process and aiding in paperless functioning, digitisation of legal system would save an estimated Rs 12,000 Crore in a year across all the Courts.

According to Mr. Navadgi, “Digitisation is the conversion of paper documents into electronic form, and Digitisation of the Legal system shall mean e-filing, e-records and a database of all case records.” He also pointed out that the process of Digitization of Legal System has already commenced.

Mr. Krupesh Bhat, Founder of LegalDesk.com, delivered a presentation on ‘Digitization of Legal System’ and threw some light on how eNotary would benefit citizens. Following this was a panel discussion by panelists Prabhuling K. Navadgi and Kishore Mandyam moderated by Sanjay Khan Nagra. Mr. Bhat insisted on the implementation of e-filing system in courts across the country, which is currently available in only a few states including Delhi, Haryana, Madhya Pradesh and Maharashtra. He also said that the judges, litigants, advocates and the registry across all courts can make use of Aadhar-based eSign, which upholds transparency in the system.

At the event, LegalDesk.com released a white paper on eNotary, which sets out a detailed framework for the proposed eNotary implementation. Here’s a glimpse of it.

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To sum up, there is a pressing need for digitisation of the legal system of our nation, to start using eNotary as well as E-evidence. In this regard, the Government can collaborate with various service providers to aim towards using technology to reduce pendency of courts and suitable softwares to manage and recognise the pending cases.

No doubt, it is the citizens who would reap benefits the most with the digitisation of Indian legal system. The conference was a huge success and the findings are also remarkable. The support of speakers, participants, iSPIRT members and not to mention LegalDesk.com team, made the event a huge success.