How is a company incorporated?
A company is incorporated by filing SPICe+ with the Registrar for the office where its registered office will sit. The subscribers sign with a digital signature. The certificate of incorporation is conclusive evidence that the company exists. A private company, a one person company, and a section 8 company each use that form, with different contents.
Who can be incorporated?
A private company needs at least two members and two directors. A one person company needs one member, who is a natural person and an Indian citizen, and a nominee named in the memorandum. A public company needs at least seven members and three directors. A section 8 company needs the licence for its objects. The filings for those types are on the private company page, the one person company page, and the section 8 page.
What does the form contain?
SPICe+ carries the memorandum, the articles, the registered office, and the details of the subscribers and the first directors. A subscriber who does not already have a director identification number applies for it in the same form. The form also allots the company’s PAN and TAN. A name can be reserved first, and that reservation is held for 20 days, or the name can be proposed in the incorporation itself. The memorandum’s clauses are on the memorandum page. What a director identification number is, outside this form, is on the DIN page.
The older sequence, of reserving the name, then buying the signatures, then applying for a number on DIR-3, then filing a separate incorporation, is not the current filing. The subscribers do need a digital signature to sign. They do not wait for a separate DIN approval before the form will be accepted.
What does the certificate prove?
Section 7 makes the certificate conclusive evidence that all the requirements of the Act have been complied with and that the company is incorporated. The members of a company limited by shares are liable only for the amount unpaid on their shares. That does not let a private company invite the public to subscribe. A private company’s articles also restrict the transfer of its shares. What the company does in the weeks after the certificate is a separate set of filings.
Frequently asked questions
Four questions cover the director’s number, the 20-day reservation, a public offer, and the certificate.
Must a DIN be approved before the form?
No. A subscriber who does not already have a director identification number applies for it in SPICe+. A separate DIR-3 is for a person who needs a number outside an incorporation.
How long is a reserved name held?
A name reserved on its own is held for 20 days. The incorporation has to be filed in that period. The incorporation form can also propose the name itself.
Can a private company raise money from the public?
No. A private company prohibits an invitation to the public to subscribe for its securities. Incorporation does not open a public offer.
Is the certificate only an acknowledgement?
No. The certificate of incorporation is conclusive evidence that the company is incorporated and that the requirements of the Act have been complied with.
Sources
Incorporation is section 7 of the Companies Act, 2013. The integrated form is SPICe+. The certificate is conclusive evidence of incorporation.