New Process of Incorporation of Entity in India

Stakeholders may kindly note that the Ministry of Corporate Affairs has updated the process of incorporating Companies in India to encourage Ease of Doing Business (EODB) initiative. The new web Form ‘SPICe+’ for incorporating Indian Companies shall be deployed by the Ministry on 15th February, 2020 on its website.

New Rules: Companies (Incorporation) Amendment Rules, 2020

Concerned Authority: Registrar, Central Registration Centre

Effective From: February 15, 2020

Key Changes introduced by the Ministry of Corporate Affairs (MCA) in the company incorporation process:

1. SPICe+ would be an integrated Web form offering multiple services viz. name reservation, incorporation, DIN allotment, mandatory issue of PAN, TAN, EPFO, ESIC, Profession Tax (Maharashtra) and Opening of Bank Account. It will also facilitate allotment of GSTIN wherever so applied for by the Stakeholders.
2. Features of the new Form:
   1. SPICe+ would be an integrated Web Form.
   2. SPICe+ would have two parts viz.: Part A-for Name reservation for new companies and Part B offering a bouquet of services viz.
      • Incorporation
      • DIN allotment
      • Mandatory issue of PAN
      • Mandatory issue of TAN
      • Mandatory issue of EPFO registration
      • Mandatory issue of ESIC registration
      • Mandatory issue of Profession Tax registration (Maharashtra)
      • Mandatory Opening of Bank Account for the Company and
      • Allotment of GSTIN (if so, applied for)

Why SPICe+ is required ?

As the Indian Economy is growing fast and Government is taking new initiatives day by day, consequently, to fulfill the growing demand, the single form is getting deployed to integrate multiple services. MCA is facilitating the process of incorporation of Companies by introducing “Spice+”.

In comparison to the existing incorporation process, it has the potential to save a lot of time, if implemented properly. Most of the post incorporation registrations including PAN, TAN, EPFO (Employee Provident Fund Organization), ESIC (Employees' State Insurance Corporation), GST (Goods and Services Tax), Professional Tax (Maharashtra) are now integrated with the incorporation application itself. The stakeholders are currently spending a lot of time and struggling to open the bank account for their Indian Companies post incorporation. Moreover, the Commencement of Business can be filed only upon receipt of subscription amount in the bank account from the subscribers of the Memorandum of Association.

This initiative integrates the company incorporation procedure, post incorporation registrations, opening of Bank Account, therefore, introduced to reduce the paperwork and looks time efficient.

The existing process and timeline of incorporation of companies may vary accordingly as per the new norms.

Please click here to view the updated rules from the Ministry of Corporate Affairs.