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How to incorporate a private limited company?

Kavita D. Shah 
on 27 November 2019

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Private Limited Company is the most prevalent and popular type of corporate legal entity in India. The Ministry of Corporate Affairs ("MCA") governs private limited company registration in India. Companies are incorporated and regulated under the Companies Act, 2013 and the Companies Incorporation Rules, 2014. The Author, in this article has included all the amendments up to 25th November 2019 for incorporating the private limited company.

How to incorporate a private limited company

The MCA has launched a new and simplified web based service R.U.N. (Reserve Unique Name) for reserving a name in place of INC-1. This has also removed the requirement to use a Digital Signature Certificate (DSC) during name reservation. It was another value addition to Ease of Doing Business in India.

Further, MCA had Simplified Proforma for Incorporating Company Electronically (SPICe) e-Form in place of INC-29. Further, the Ministry has also integrated the MCA21 System with the CBDT for issue of PAN and TAN to a company incorporated using (SPICe). Stakeholders submit applications for PAN and TAN at the time of submitting applications for incorporation through SPICe. The PAN/TAN allotted by Income Tax Department are being affixed on the Certificate of Incorporation of the company. Stakeholders can apply for DIN(Director Identification Number) through SPICe up to three directors. This has resulted in reduction in the number of processes and time taken for Starting a Business in the country.

The Article focuses on R.U.N. service, SPICe, SPICe MOA, SPICe AOA and AGILE.

STEP 1: Application for Name Approval in R.U.N.

The Applicant has to login into the account on MCA Portal. After that click the R.U.N service available under the MCA Service tab. The details required to feed are : Entity Type, CIN (only if existing company wishes to change its name), Proposed Name (Auto Check Facility), Comments(Mention the main object of the proposed Company and other relevant information), Choose file (if any attachments).

Points to be noted while applying for new Name for the proposed Company :

1. No requirement to use a Digital Signature Certificate (DSC) during name reservation.
2. Maximum 2 names can be applied
3. Reserved Name shall be valid for 20 days
4. ROC fees shall be Rs. 1000/-
5. No need to feed the details of Directors in R.U.N.
6. Proposed Company can also apply for the name directly in the SPICe form instead of R.U.N.

STEP 2: Drafting of Documents and Filing of e-Forms

A. Following Documents should be ready before filing the SPICe e-form:

1. DIR - 2 of all the Directors (Self -attested)
2. INC - 9 Declaration by the subscribers and directors (Self - Attested and not affidavit)
3. Proof of Identity and address of all the directors and subscribers
4. PAN card is compulsory for all the directors / subscribers not having DIN.
5. All the Subscribers should have DSC
6. One of the Director should have DSC
7. Proof of Registered office (Conveyance / Rent Agreement / Lease Deed)
8. NOC from the owner of property
9. Copy of utility bill not older than 2 months for the Registered office
10. Correspondence Address of the Proposed Company (Note: if the correspondence address is not the registered office address, then company can file INC- 22 e-form within 30 days from the date of incorporation to the registrar for notice of situation of registered office

B. Filling the data in SPICe (INC 32) e-form, SPICe MOA (INC 33), SPICe AOA (INC 34), AGILE e-form:

1. Maximum 7 Subscribers details can be given in SPICe e-form, for other subscribers an additional sheet to be attached with their signatures in the sheet to the SPICe e-form
2. Maximum 3 Directors can apply for the DIN in SPICe e-form
3. Application for the PAN and TAN (for details do read the help kit of SPICe)
4. Company can apply for GST, IEC through AGILE e-form
5. Application for Name availability (if not applied through R.U.N.)
6. No need to file separate DIR-12 for the Directors
7. Details of the Main Object, Ancillary Object, Capital Clause, Liability Clause, Situation of Registered office, details of subscribers, etc to be entered in SPICe MOA (INC 33)
8. Details of the first directors to be mentioned in SPICe AOA (INC 34)
9. DSC of all the subscribers is required in SPICe MOA and SPICe AOA
10. DSC of Witness / Practicing Company Secretary required in front of whom the subscribers have signed the SPICe MOA and SPICe AOA.
11. DSC of one of the Directors required.

 

C. Once all the 4 forms (SPICe (INC 32) e-form, SPICe MOA (INC 33), SPICe AOA (INC 34), AGILE e-form) (INC ready with the applicant, upload all four e-forms Linked form on MCA website and make the payment of the same

D. Filing of INC - 20A e-form i.e.: Declaration for commencement of business:

 

NOTE: A company incorporated after the commencement(i.e. from 31st July 2019) of the Companies (Amendment) Ordinance 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless a declaration is filed by a director within a period 180 days of the date of incorporation of the company in INC - 20A e-form with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration.

Disclaimer: The views presented are in personal & in generic form and not as a legal advice, further it has nothing to do with where I am rendering my professional services. Users of this information are expected to refer to the relevant existing provisions of the applicable laws.

The author can also be reached at csshahkavita@gmail.com


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