The increased level of business transactions in a country helps in growth and development of a nation. One of the most preferred vehicles for carrying out business operations is the incorporation of a company. Not only does a company have an identity distinguished from its members restricting the limits of their liability, it has perpetual succession having its own capacity to own or sell property and to sue or be sued.
Incorporation of Company
The Government has facilitated the process of incorporation of a company by digitalizing most of the procedures.
In order to incorporate a company, a Government Process Re-engineering single application form – e-Form Simplified Proforma for Incorporating Company Electronically (hereinafter referred to as "SPICe") is required to be submitted for the purpose of reservation of name, incorporation of a new company and/or application for allotment of Director Identification Number (hereinafter referred to as "DIN") and/or application for Permanent Account Number (hereinafter referred to as "PAN") and Tax Deduction Account Number (hereinafter referred to as "TAN").1
This e-Form is accompanied by supporting documents including details of Directors & subscribers, Memorandum of Association and Articles of Association, etc.
Once the e-Form is processed and found complete, company would be registered and Certificate of Incorporation would be issued. Also DINs gets issued to the proposed Directors who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company. In addition, PAN and TAN would get allotted to the Company by the Income Tax Department.
With a view to enable the Government's visions of 'Ease of doing Business', the process of company incorporation has been simplified by reducing the number of processes involved. While the integration of major incorporation procedures in a single e-Form – SPICe and submission of the same along with the requisite fee does not require payment of any fee in the following cases:
- where the authorized capital of the company is up to INR10,000,000
- where number of members are up to 20 in case of company not having share capital.
The time taken for processing and reservation of company name has been significantly reduced with almost 90% applications are being approved within 1 working day making the process a time efficient process.
The Government has expedited the process of incorporation of company by reduction of time to a great extent and minimizing the monetary requirement with the help of automated procedures and efficient management system. This has resulted in speed, greater transparency, uniformity and eradication of discretion.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.