SPICe: Benefits of Registering New Business in India

Narendra Kumar

03 Dec, 2020

Like a sapling needs the right amount of sunshine, water, and nutrients to grow. Similarly, a new business idea requires an efficient and secure environment to flourish. Especially in today’s competitive market, ruthlessly ruled by corporate giants and conglomerates, support to the entrepreneurs and their budding ideas should be a priority for the Government. Concrete measures should be proactively taken by the Government of India to ensure the smooth establishment and operation of the new businesses. Let’s take a look for the Benefits of Registering New Business in India through SPICs.

Benefits of Registering New Business in India

At present, India fares quite poorly at the World Bank Ease of Doing Business ranking, lagging behind in the 130th position. Under the charismatic leadership of the Honourable Prime Minister, the Government is determined to bring about monumental shifts in the business sector of the country. The aim is to secure India’s position amongst the Globes’ top 50 destinations in ensuring ease of doing business and offering a commerce-friendly atmosphere. In the last couple of years, initiatives such as ‘Make in India,’ ‘Unified Payments Interface,’ etc. have been launched to promote the growth of indigenous industries, and to transact in a transparent and efficient manner.

The introduction of SPICe (Simplified Performa for Incorporating Companies Electronically) under the Companies Fourth Amendment Rules 2016 is another bold step. It provides a digital platform to register and start a new business. The online application ensures transparency and efficiency and eliminates corruption by by-passing the corrupt elements in the system. The concept is similar to the erstwhile INC29, which simplified the effort of establishing a business. Any type of company, be it Sole Proprietorship or Private Limited or Public Limited, can be incorporated using the online platform.

As per the provisions of SPICe, one can file an Article of Association and a pre-drafted Memorandum of Association electronically, thereby saving precious time and removing the intricate process of filing the same manually to the respective authorities. Also, the applicant can fill up the INC32 form electronically, providing mandatory details about the business. There is provision for uploading scanned copies of the affidavits, proof of office address, copies of utility bills, etc. to ease the process of verification. The steps involved in this process include the digital signature certificates, director’s identification number, the filing of a memorandum of association, articles of association and other mandatory business details.

The various steps involved in the process, arranged chronologically, are as follows:

• Digital Signature Certificate (DSC): The very first step being followed is the digital signature certificate which is to be applied by the directors of a company.
• Director Identification Number (DIN): To be applied by a maximum of three directors during the filing of INC32. Director’s identification number or DIN is a unique number assigned to each director, and it is unique for every director.
• INC1: For obtaining the name of the business after the approval from the Registrar of Companies.
• INC32: For providing the mandatory details about the business.
• INC33: For filing the Article of Association (AOA) of a company
• INC34: For filing the Memorandum of Association (MOA)
• Ministry of Corporate Affairs: All the filled up forms are filed with MCA along with the supporting documents

The following documents are required for filing INC32:

• Memorandum of Association
• Articles of Submission
• Affidavit and Declaration by first subscriber and director.
• Office Address Proof.
• NOC from the sole proprietor/associate/partner of the existing company.
• Proof of residential address, and subscribers.
• Proof of identity of the directors.

Considering the innumerable benefits of the SPICe system, it can be chosen as a preferred method by the companies to start a new business.

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• Top 15 Reasons Why Startups in India Fail
• Tax Benefits for Handicraft Business in India