CORPORATE ENTITIES – COMPANIES

Introduction

The term "Company" originates from the Latin words 'Cum' (meaning "with" or "together") and "Panis"
(meaning "bread"), historically referring to a group of people sharing meals together. In modern legal
terms, a company is a group of individuals who unite to achieve a common purpose, incorporating
themselves as a separate legal entity to carry out that purpose.

According to Halsbury’s Laws of England, a company is described as a collection of individuals united

into one body under a special denomination, having perpetual succession and vested with the capacity
to act as a legal entity. This includes the ability to own property, enter into contracts, and engage in legal
proceedings.

The Supreme Court of India has clarified that a company does not have the status of a citizen under the
Indian Constitution.

Key Features of a Company

1. Formation: Under the Companies Act, 2013, a company may be formed for any lawful purpose with
the following requirements:
o Public Company: Requires at least seven persons.
o Private Company: Requires at least two persons.
o One Person Company: Requires only one person, and is categorized as a private company.
2. Types of Companies: According to Section 3 of the Companies Act, 2013, a company may be one of
the following:
o Company Limited by Shares: Liability of members is limited to the amount unpaid on their
shares.
o Company Limited by Guarantee: Liability of members is limited to the amount they
undertake to contribute in the event of winding up.
o Unlimited Company: Members have unlimited liability for the company's debts.

These defining characteristics make the company a unique and structured entity under the law, with
distinct forms and purposes.

Classification of Companies

(i) Classification on the Basis of Incorporation:

1. Statutory Companies: Constituted by a special Act of Parliament or State Legislature. The

Companies Act, 2013 does not apply to them. Examples include the Reserve Bank of India and Life
Insurance Corporation of India.
2. Registered Companies: Incorporated under the Companies Act, 2013 or any previous company law
and registered with the Registrar of Companies.

(ii) Classification on the Basis of Liability:

1. Unlimited Companies: Liability of members is unlimited. They may or may not have share capital
and can be either public or private. Members are liable for company debts without limit.
2. Companies Limited by Guarantee: Members' liability is limited to the amount they agree to
contribute to the company’s assets in the event of winding up. They act as guarantors up to the
agreed amount.
3. Companies Limited by Shares: Members’ liability is limited to the amount unpaid on their shares.
Shareholders are liable only for the balance unpaid on their shares, e.g., if a share's face value is Rs.
100 and Rs. 85 has been paid, the shareholder must pay only the remaining Rs. 15.

(iii) Other Forms of Companies:

1. Section 8 Companies: Registered for promoting commerce, art, science, sports, education,
research, social welfare, religion, charity, environment protection, or similar objectives. They do not
pay dividends to members and may be limited by guarantee or shares, but not unlimited
companies. They are registered with a license under Section 8 of the Companies Act.
2. Foreign Companies: Incorporated outside India but have a place of business in India, either
physically or electronically, and conduct business activities in India.
3. Producer Companies: Registered under Section 378A with objects or activities specified in Section
378B of the Companies Act, 2013.
4. Nidhi Companies: Non-banking financial companies under Section 406 of the Companies Act,
2013. They primarily engage in borrowing and lending money among their members. Regulated
under the Nidhi (Amendment) Rules, 2022.
5. Listed Companies: Companies with securities listed on any recognized stock exchange.
6. Small Companies: Defined as companies (other than public companies) with:
o Paid-up share capital not exceeding Rs. 4 crore (or a higher amount up to Rs. 10 crore as
prescribed).
o Turnover not exceeding Rs. 40 crore (or a higher amount up to Rs. 100 crore as prescribed).

Exclusions:

o Holding or subsidiary companies

o Companies registered under Section 8
o Companies governed by any special Act.

1. PRIVATE COMPANY

Definition (Section 2(68) of the Companies Act, 2013):

A "Private Company" is defined as a company which, by its articles:

1. Restricts Share Transfer: Limits the right to transfer its shares.

2. Limits Membership: Except in the case of a One Person Company, limits the number of its members
to 200. For this purpose:
o Persons holding shares jointly are treated as a single member.
o Employees of the company and former employees who were members while employed and
continue as members after leaving employment are not counted in the membership limit.
3. Prohibits Public Invitation: Prohibits any invitation to the public to subscribe to any securities of the
company.

Additional Points:

 Debentures: A private company can issue debentures to any number of persons, but must not invite
the public to subscribe to them.
 Alteration of Articles: If a private company alters its articles such that they no longer meet the
requirements for a private company, it will cease to be a private company from the date of such
alteration.
 Name: The name of a private company must end with “Private Limited.”
Formation and Directors:

 Formation: A private company can be formed for any lawful purpose by at least two persons
subscribing to a memorandum and complying with registration requirements.
 Directors: A private company must have at least two directors, who may also be the only two
members.

Examples of Private Companies:

1. Flipkart India Private Limited

2. Ola Automatic Engine Private Limited
3. Caratlane Trading Private Limited
4. Zomato Foods Private Limited
5. Makemytrip (India) Private Limited

2. PUBLIC COMPANY

Definition (Section 2(71) of the Companies Act, 2013):

A "Public Company" is defined as a company which is not a private company. Specifically: A subsidiary of
a non-private company is deemed a public company for the purposes of the Act, even if it retains private
company status in its articles.

Formation and Structure:

Formation (Section 3(1)(a)): A public company may be formed for any lawful purpose by at least seven
persons who subscribe their names to a memorandum of association and comply with registration
requirements.

Membership: A public company consists of at least seven members, and the number of members is not
limited to 200.

Transferability of Shares:

 Free Transferability: Securities or other interests of any member in a public company are freely
transferable (Section 58(2)). However, contracts or arrangements regarding the transfer of securities
are enforceable as contracts.
 Legal Precedent: In Western Maharashtra Development Corpn. Ltd. v. Bajaj Auto Ltd. [2010], it was
established that while private companies restrict share transferability, public companies allow for the
free transfer of shares, supporting public participation and liquidity.

Examples of Public Companies:

1. Snapdeal Limited
2. Procter & Gamble Health Limited
3. Reliance Agro Tech Ltd
4. Godrej Capital Limited

3. ONE PERSON COMPANY

OPC is a one shareholder corporate entity, where legal and financial liability is limited to the company
only. In India, in the year 2005, the J.J. Irani Expert Committee recommended the formation of OPC. It
had suggested that such an entity may be provided with a simpler legal regime through exemptions so
that the small entrepreneur is not compelled to devote considerable time, energy and resources on
complex legal compliances.

Characteristics of One Person Company (OPC)

1. Financial Statements: OPCs are not required to include a cash flow statement in their financial
statements.
2. Memorandum Requirements: The Memorandum of Association must state the name of another
person, with their written consent, who will become the member in case of the original subscriber’s
death or incapacity. This consent must be filed with the Registrar at incorporation.
3. Name Display: The term “One Person Company” must be mentioned in brackets below the company
name wherever it is printed, affixed, or engraved.
4. Annual Return: The annual return must be signed by the company secretary or, if there is no
company secretary, by the director.
5. Resolutions: For OPCs, an ordinary or special resolution communicated by the member and entered
into the minutes-book is sufficient. The date on the minutes-book is considered the meeting date.
6. Board Meetings: If there is only one director, a resolution entered in the minutes-book, signed, and
dated by the director is deemed to constitute the Board meeting.
7. Approval of Financial Statements: The financial statements must be approved by the Board of
Directors before being signed by one director and submitted to the auditor.
8. Filing of Financial Statements: OPCs must file a copy of the financial statements, along with required
attachments, within 180 days from the end of the financial year.
9. Board Meetings Requirement: OPCs, along with small and dormant companies, must hold at least
one Board meeting in each half of the calendar year, with no gap of less than 90 days between
meetings. This does not apply if there is only one director.

Examples of OPCs

1. Pharma First (OPC) Private Limited

2. Solar Nest (OPC) Private Limited

4. NIDHI

Definition and Purpose

A Nidhi is a non-banking financial company designed to foster savings among its members. It accepts
deposits and provides loans solely to its members against collateral such as jewels or property. Nidhis
operate on the principle of mutual benefit, meaning they only conduct business with their members,
excluding bodies corporate or trusts from membership. They are prohibited from engaging in activities
such as chit funds, hire purchase, insurance, or investments in shares and debentures.

Regulatory Framework
Nidhis are regulated under the Nidhi Rules, 2014, enacted under sections 406 and 469 of the Companies
Act, 2013. These rules apply to companies previously declared as Nidhis under the Companies Act, 1956,
those functioning similarly and awaiting official recognition, as well as companies incorporated as Nidhis
under the current Act.

Characteristics of Nidhi

1. Incorporation and Capital Requirements

o Must be incorporated as a public company with “Nidhi Limited” in its name.
o Requires a minimum paid-up share capital of ten lakh rupees.
 o Within 120 days of incorporation, it must file Form NDH-4 demonstrating at least 200
members and net owned funds of 20 lakh rupees.
2. Share Capital and Allotment
o Equity shares must be fully paid-up with a nominal value of at least ten rupees each.
o No service charge is levied for issuing shares.
o Each deposit holder must receive a minimum of ten equity shares or shares worth one
hundred rupees.
o Savings and recurring deposit holders must hold at least one equity share of ten rupees.
3. Membership
o Bodies corporate and trusts cannot be members.
o Membership must be maintained at no fewer than 200 members.
o Minors are not eligible for membership, but deposits can be made by guardians for minors.
o Members cannot transfer more than 50% of their shares while holding a loan or deposit.
4. Branches
o Nidhis can open up to 3 branches within their district if they have made net profits in the past
3 years.
o For more branches or those outside the district, prior approval from the Regional Director via
Form NDH-2 is required.
o Branches outside the state are not permitted.
o Closing branches involves board approval, Regional Director’s consent, public notification,
and Registrar intimation.
5. Acceptance of Deposits
o Fixed deposits must range from 6 to 60 months; recurring deposits from 12 to 60 months.
o Savings account balances eligible for interest are capped at one lakh rupees, with interest
rates not exceeding 2% above nationalized banks' savings rates.
o Fixed and recurring deposit interest rates cannot exceed the maximum rate prescribed by the
Reserve Bank of India for non-banking financial companies.
6. Un-encumbered Term Deposits
o Nidhis must keep at least 10% of outstanding deposits in unencumbered term deposits with
scheduled commercial banks or post offices.
o Temporary withdrawals are allowed for unforeseen commitments with Regional Director
approval.
7. Loans by Nidhi
o Loans are provided only to members.
o Loan limits depend on total member deposits, ranging from two lakh rupees to fifteen lakh
rupees.
o New loans are restricted if the Nidhi has not been profitable for the past three years.
o Members in default on previous loans are ineligible for new loans.
8. Rate of Interest on Loans
o Interest rates on loans cannot exceed seven and a half percent above the highest deposit
interest rate.
o Rates must be calculated on a reducing balance method and uniformly applied within loan
classes.
o Interest rates must be displayed at the registered office and branches.
9. Directors
o Directors must be members of the Nidhi.
o They can serve for up to 10 consecutive years, with reappointment only after a 2-year break.
o Directors must fulfill Director Identification Number requirements and meet fit and proper
person criteria.
10. Dividend
o Dividends declared by a Nidhi cannot exceed 25% of the annual profits.
5. SECTION 8 COMPANY

1. Definition and Purpose - A Section 8 company is a non-profit organization formed to promote

various objectives such as commerce, art, science, sports, education, research, social welfare, religion,
charity, or environmental protection. It must apply any profits or other income exclusively toward its
objects and cannot distribute dividends to its members.

2. Registration and Licensing - Under Section 8 of the Companies Act, 2013, the Central Government
can grant a license to a person or association wishing to register as a limited company without
including “Limited” or “Private Limited” in its name, provided it meets specific criteria. The company
must demonstrate that it:

o Promotes one or more of the specified objects.

o Applies its profits to these objects.

o Prohibits dividend payments to its members.

The Registrar will register such a company upon application in the prescribed form.

3. Privileges and Obligations - A Section 8 company enjoys the same privileges and is subject to the
same obligations as other limited companies. It must adhere to additional conditions specified by the
Central Government.

4. Alteration and Conversion

o Any alteration to the company's memorandum or articles requires prior approval from the Central
Government.

o A Section 8 company can convert itself into another type of company only after meeting prescribed
conditions.

5. Conversion of Existing Companies - A limited company with similar objects and restrictions as a
Section 8 company can apply to convert its status and omit “Limited” or “Private Limited” from its
name, subject to Central Government approval. This company will then be governed by the
provisions applicable to Section 8 companies.

6. Revocation of License - The Central Government may revoke the license if the company contravenes
the requirements of Section 8 or operates fraudulently. The company must then add “Limited” or
“Private Limited” to its name. The company will have an opportunity to be heard before the
revocation.

7. Winding Up and Amalgamation - If a license is revoked and it is in the public interest, the Central
Government may order the company to wind up or amalgamate with another Section 8 company
with similar objects. In such cases, any remaining assets after settling liabilities can be transferred to
another Section 8 company or credited to the Insolvency and Bankruptcy Fund.

8. Amalgamation Restrictions - A Section 8 company may only amalgamate with another Section 8
company having similar objects.

9. Penalties - Non-compliance with Section 8 requirements results in significant fines. The company can
be fined between ten lakh and one crore rupees, and directors or officers in default may face fines
ranging from twenty-five thousand to twenty-five lakh rupees. In cases of fraudulent conduct, officers
are subject to penalties under Section 447 of the Act.
Characteristics of Section 8 Company

 Purpose-Driven Formation - A Section 8 company is established for promoting objectives such as

commerce, art, science, sports, education, research, social welfare, religion, charity, environmental
protection, or similar aims.
 Application of Profits - Any profits earned by the company are required to be used exclusively for
advancing its stated objects, rather than being distributed to members.
 Dividend Prohibition - The company is prohibited from paying dividends to its members, ensuring
that any surplus is reinvested in its activities.
 Name and Incorporation - The company can be incorporated without including “Limited” or “Private
Limited” in its name, reflecting its non-profit status.
 Capital Requirements - There is no minimum paid-up capital requirement for a Section 8 company.
 Stamp Duty Exemption - Section 8 companies are exempted from stamp duty registration, reducing
the cost of compliance.
 Privileges and Exemptions - Section 8 companies enjoy various privileges and exemptions from
specific sections of the Companies Act, 2013.
 Conversion Restriction - A One Person Company cannot be incorporated or converted into a
Section 8 company.
 Legal Status- A Section 8 company maintains an independent corporate legal entity, similar to other
forms of companies or Limited Liability Partnerships, which enhances its credibility with the public.

6. PRODUCER COMPANY

Chapter XXIA (Section 378A to 378ZU) of the Companies Act, 2013 deals with producer companies. A
producer company is a body corporate established with objects or activities specified in Section 378B of
the Companies Act, 2013, and registered as such under the provisions of this Act or the Companies Act,
1956. The membership of producer companies is open to individuals who themselves are primary
producers, meaning those involved in the direct production of agricultural produce.

Objects of Producer Companies

In terms of Section 378B of the Companies Act, 2013, the objects of a producer company registered
under this Act may include all or any of the following:

1. Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary
produce of the members, or import of goods or services for their benefit. The Producer Company
may carry out these activities either directly or through other institutions.
2. Processing including preserving, drying, distilling, brewing, vinting, canning, and packaging of the
produce of its members.
3. Manufacture, sale, or supply of machinery, equipment, or consumables mainly to its members.
4. Providing education on mutual assistance principles to its members and others.
5. Rendering technical services, consultancy services, training, research and development, and all other
activities for promoting the interests of its members.
6. Generation, transmission, and distribution of power, revitalisation of land and water resources, their
use, conservation, and communications related to primary produce.
7. Insurance of producers or their primary produce.
8. Promoting techniques of mutuality and mutual assistance.
9. Welfare measures or facilities for the benefit of members as decided by the Board.
10. Any other activity ancillary or incidental to the activities listed above or that promotes the principles
of mutuality and mutual assistance among the members in any other manner.
11. Financing of procurement, processing, marketing, or other activities specified above, including
extending credit facilities or other financial services to its members.
Every Producer Company must primarily deal with the produce of its active members to achieve its
objectives.

Examples of Producer Companies

1. Kisan Bandhu Agro Producer Company Limited

2. Kisan Bhoomi Producer Company Limited
3. Agro Acres Women Farmers Producer Company Limited

7. FOREIGN COMPANY

As per Section 2(42), a "foreign company" refers to any company or body corporate incorporated outside
India which:

1. Has a place of business in India, whether by itself or through an agent, physically or via electronic
mode.
2. Conducts any business activity in India in any manner.

Key Provisions for Foreign Companies

1. Registration Requirements (Section 380):

o Certified copy of the charter, statutes, or memorandum and articles, along with an English
translation if needed.
o Full address of the registered or principal office.
o List of directors and secretary with prescribed details.
o Name(s) and address(es) of Indian representatives authorized to accept legal notices.
o Principal place of business in India.
o Details of previous places of business in India.
o Declaration of no criminal conviction of directors or authorized representatives.
o Any other prescribed information.

2. Name and Liability (Section 382): The company must display its name, country of incorporation, and
the fact of limited liability in the specified places or documents.

3. Winding Up (Section 376): A foreign company ceasing business in India may be wound up as an
unregistered company under Sections 375 to 378, even if dissolved or ceased to exist in its country of
origin.

4. Indian Shareholding Requirement (Section 379): If more than 50% of the paid-up share capital is
held by Indian citizens or Indian bodies corporate, the foreign company must comply with Indian
laws as if it were an Indian-incorporated company.

5. Books of Account (Section 381): A foreign company must maintain books of account and file its
balance sheet and profit & loss account with the Registrar of Companies (ROC) annually.
6. Key Applicability of Indian Laws (Section 384):
o Debentures: Provisions of Section 71 apply.
o Annual Returns and CSR: Provisions of Sections 92 and 135 apply with exceptions.
o Books of Account: Section 128 requires foreign companies to maintain accounts of
transactions in India.
o Charges: Chapter VI regarding registration of charges applies.

o Inspection, Inquiry, and Investigation: Chapter XIV applies to the Indian business of foreign
companies.
7. Place of Business Definition (Section 386): A place of business includes a share transfer or
registration office, but merely holding property does not qualify as such.

Case Law Examples

1. Tovarishestvo Manufacture Liudvig Rabenek Case:

o Representatives frequently staying in a hotel in England for business purposes constituted a
place of business.
2. Property Holding:
o Merely holding property does not amount to having a place of business.

Illustration: India and America have had strong business relations over the many years. Some renowned
American companies are Amazon, Citibank, Coca-Cola, Ford India, Google, American Express, Pepsico,
Hewlett Packard, IBM, JP Morgan Chase, Adobe Systems Incorporated, Apple Inc., Microsoft Corporation,
Cognizant, Oracle.

MOA AND AOA IN COMPANIES LAW PAGE 30-42 SBIL BOOK

FORMATION AND REGISTRATION OF CORPORATE ENTITIES USING SPICe+

As part of the Government of India’s Ease of Doing Business (EODB) initiative, the Ministry of
Corporate Affairs (MCA) introduced SPICe+ (pronounced "SPICe Plus"), an integrated web form that
replaced the earlier SPICe form, effective from 23rd February 2020. SPICe+ provides 11 services
through three Central Government Ministries/Departments and three State Governments, streamlining
company incorporation processes in India.

Features of SPICe+

SPICe+ is divided into two parts:

 Part A: For name reservation for a new company.

 Part B: For incorporation and additional services, including:

a) Incorporation of the company

b) DIN allotment
c) Mandatory issue of PAN and TAN
d) Mandatory registration for EPFO (Employees' Provident Fund Organization) and ESIC
(Employees' State Insurance Corporation)
e) Profession Tax registration (for Maharashtra, Karnataka, and West Bengal)
f) Mandatory opening of a bank account for the company
g) Allotment of GSTIN (if applied)
h) Shops and Establishment Registration Number (only for Delhi)

Key Features

 Filing Process: Users can file Part A (name reservation) first and then submit Part B (incorporation
and other services), or both parts can be filed simultaneously.
 If only Part A is submitted for name reservation, Part B and linked forms will be available once
the name is approved.
  The RUN service (Reserve Unique Name) is now applicable only for change of name of an
existing company. For new incorporations, SPICe+ must be used.

Seamless Integration

 Information entered in Part A will automatically pre-fill in other forms, such as AGILE-PRO (for
GSTIN, EPFO, ESIC, and Professional Tax), eMoA (electronic Memorandum of Association), eAoA
(electronic Articles of Association), URC-1 (if applicable), and INC-9 (declaration form).
 SPICe+ performs real-time data validation during filing, improving the incorporation process.
 Once the form is complete, it can be converted into a PDF for Digital Signature Certificates
(DSC) affixation and submission.

Mandatory Services for New Companies

 EPFO and ESIC registrations are mandatory for all companies incorporated on or after 23rd
February 2020.
 In Maharashtra, Profession Tax registration is mandatory for all newly incorporated companies.
 Every company must apply for opening a bank account through the AGILE-PRO linked form.

INC-9 Declaration

 The INC-9 Declaration for all subscribers and first directors is auto-generated in PDF format and
submitted electronically, except where:
o The total number of subscribers and/or directors exceeds 20.
o Any subscriber or director does not have a DIN or PAN.

The SPICe+ form significantly simplifies the company incorporation process by offering a comprehensive,
integrated platform for filing and compliance. It eliminates the need for multiple submissions, ensuring
that new companies can start their business operations efficiently.

STEP I: Apply for Name Approval

A. Login on MCA Website - Applicant must log into their account on the MCA Website. (Existing users
can use their account, while new users must create one.) After logging in, click on the
SPICe+ icon in MCA Services. The online form will open. (This form cannot be downloaded.)

B. Details Required in Online Form

New fields introduced in Part A of SPICe+ are:

1. Type of company
2. Class of company
3. Category of company
4. Sub-Category of company
5. Main division of industrial activity of the company
6. Description of the main division

C. Choose File - This option allows uploading PDF documents. If any files need to be attached, they can
be uploaded here.

D. Submission of Form on MCA Website - After completing the above steps, the user submits the form
on the MCA website.
E. Validity of Reserved Name - The reserved name is valid for 20 days from the date of approval. For
changing the name of an existing company, the validity period is 60 days from the approval date.

STEP II: Preparation of Documents for Incorporation of Company

After name approval or for the incorporation of the company, the applicant must prepare the following
documents:

 INC-9 – Declaration by Subscriber(s) and Director(s).

 DIR-2 – Declaration from the proposed Directors, along with a copy of Proof of Identity and
residential address.
 Form MBP-1 – Disclosure of interest in other entities.
 NOC from the owner of the property where the registered office will be located.
 Proof of office address (e.g., Conveyance/Lease deed/Rent Agreement along with rent receipts).
 Copy of utility bills not older than two months.
 If the subscribers/directors do not have a DIN, they must attach proof of identity and address.
 All subscribers must have Digital Signatures.
 Copy of PAN from the subscribers, along with proof of identity and residential address.

STEP III: Fill the Information in the Form

Once all the necessary documents/information are ready, the applicant must fill the information in the
SPICe+ Part B form.

Features of SPICe+ (INC-32) Form:

1) Maximum details of subscribers: Up to 7 subscribers. If more subscribers are involved, a physically

signed MOA (Memorandum of Association) and AOA (Articles of Association) must be attached to
the form.
2) Authorized and subscribed share capital:
a) Minimum required for an OPC (One Person Company): 1.
b) Minimum required for a private company: 2.
c) Minimum required for a public company: 7.
3) Maximum directors: 20 directors.
4) DIN Application: A maximum of 3 directors are allowed to apply for a DIN (Director Identification
Number) during incorporation (except for a producer company).
5) Application for Name: Can be made using SPICe+ Part A.
6) Digital Signature Certificate (DSC): By affixing the DSC of the subscriber on INC-33 (MOA), the
date of signing will be auto-filled.
7) PAN/TAN Application: Mandatory for all fresh incorporation applications filed via SPICe+.
8) Additional Registrations: The company can apply for:
a) GSTIN (Goods and Services Tax Identification Number),
b) ESIC (Employees State Insurance Corporation),
c) EPFO (Employees' Provident Fund Organization),
d) Professional Tax Registration (for Maharashtra, Karnataka, West Bengal), and
e) Bank Account through AGILE-PRO form.
9) Companies incorporated from January 26, 2018, with nominal capital ≤ ₹15 lakh or no share capital,
and with up to 20 members, do not need to pay fees for the INC-32 form.

SPICe+ (INC-32): A Single-Window Form for Incorporation

Previously, incorporating a company required several separate applications (DIN, name approval,
director's first form, registered office address, PAN, TAN, etc.). The SPICe+ form consolidates these
processes:

 Application for DIN (up to 3 directors)

 Application for Name Availability (SPICe+ Part A)
 No need for separate DIR-12 for the first director
 No need for separate INC-22 for the registered office address
 No need for separate PAN and TAN applications
 No separate GSTN application required

Points to Remember:

1. For companies with more than 7 subscribers, the MOA and AOA must be physically attached in the
format specified in Schedule I (Table A to J) in SPICe+ (INC-32).
2. If any subscriber of MOA/AOA is a foreign national, the MOA and AOA must be physically filed
along with a valid Business Visa or apostilled MOA/AOA. In such cases, e-MOA (INC-33) and e-AOA
(INC-34) are not required.
3. Stamp duty must be paid for companies with authorized capital ≤ ₹15 lakh, as it is a state matter.
The Companies Act only provides an exemption for ROC fees, not stamp duty.
4. A maximum of 3 DINs can be applied for via SPICe+. If more than 3 directors are required, the
company must first be incorporated with 3 directors, and additional directors must be appointed
later.
5. Only 1 name can be applied for via SPICe+; if the chosen name is not available, a new name must be
proposed, and the name on all form attachments must be altered accordingly.

STEP IV: Preparation of MOA & AOA (Electronic or Physical)

 After filing SPICe+ Part B, download INC-33 (e-MOA) and INC-34 (e-AOA) from the MCA
website.
 Complete these forms in accordance with Table A to J of Schedule I, then convert them to PDF
and affix the DSC (Digital Signature Certificate).
 Ensure the DSC of all subscribers, witnesses, and professionals is affixed on the subscriber sheet
of the MOA and AOA.

STEP V: Fill Details of PAN & TAN

 It is mandatory to provide PAN and TAN details in SPICe+ Form INC-32.

 The Help Kit within the SPICe+ form provides links to find the appropriate Area Code for PAN
and TAN.

STEP VI: Fill Details of GST, IEC in AGILE-PRO

 If the company wishes to apply for:

o GST registration
o ESIC registration
o EPFO registration
o Professional Tax registration (for Maharashtra, Karnataka, and West Bengal)
o Bank Account
o Shops Establishment Registration
o Import Export Code (IEC)
 Select YES and fill in the required information in the AGILE-PRO form.
STEP VII: Submission of Forms INC-32, 33, 34, AGILE-PRO-S on MCA

 Once all forms are prepared, upload the documents as a Linked Form on the MCA website and
make the necessary payment.
 If the Registrar finds that further information is needed or detects any defects in the forms, the
application will be marked for resubmission.
 Only two resubmissions are allowed for SPICe+ forms, and each must be responded to within 15
days of the Registrar’s intimation, or the form may be rejected.

STEP VIII: Certificate of Incorporation

 Once approved, the Certificate of Incorporation is issued, including CIN, PAN, and TAN in
Form INC-11.

Commencement of Business

Under Section 10A, a company with share capital cannot commence business or borrow money unless:

1. A declaration in Form INC-20A is filed by a director within 180 days of incorporation, verified
by a Company Secretary, Chartered Accountant, or Cost Accountant, confirming that each
subscriber has paid the value of the shares they agreed to take.
2. The company has verified its registered office by filing Form INC-22, as per Section 12(2).

PRECAUTION TO BE TAKEN BY PROFESSIONALS

1. Obtain engagement letter from subscriber: – As per certification in e-form DIR-12 & INC-22, a
professional declares that he has been engaged for the purpose of certification. Therefore, the
professional should take engagement letter from the promoters.
2. Verification of original records pertaining to registered office: – As per certification in e-form
INC-22, a professional declares that he has verified all the particulars (including attachments) from
original records.
3. Ensure all attachments are clear enough to read: – As per certification in e-form DIR-12 & INC-22,
a professional declares that all attachments are completely and legibly attached.
4. Ensure registered office of the company is functioning for the business purposes of the
company: As per certification in e-form INC-22, a professional declares that he has personally visited
the registered office.
5. Take a declaration to the effect that all the original documents have been handed over after
incorporation. Since as per section 7(4) copies all documents/information as originally filed should be
preserved at the registered office of the company. Therefore, a professional should take a declaration
while handing over the incorporation documents.
6. MCA Circular 10/2014: – According to this circular ROC/RD in case of omission of material fact or
submission of false/incomplete/ misleading information, the Ministry can after giving opportunity of
being heard, refer the matter to the e-governance division of MCA, which in turn may initiate
proceedings under section 447 and/ or ask the respective professional institute to take requisite
disciplinary action.
Process of Incorporation of a Public Limited Company

Requirement of Minimum Number of Directors and Shareholders:

Public Company

 Minimum Shareholders: 7 (Seven)

 Minimum Directors: 3 (Three)

Statutory Compliances

A public or private company must comply with all applicable laws, rules, and regulations, including but
not limited to: The Companies Act, 2013 , The Foreign Exchange Management Act, 1999, The Shops and
Establishment Act , The Income Tax Act, etc.

Failure to comply may result in penal action.

 There must be at least seven members to start a public company.

 No ceiling on the maximum number of members in a public company.
 A public company must have at least three directors.
 In a Public Limited Company, at least five members must be personally present at the General
Meeting to constitute a quorum.
 Shareholders of a public company can freely transfer their shares.
 A public company can invite the general public to subscribe to its shares.
 Shares of a public company can be listed on a recognized stock exchange and traded publicly.

Steps for Incorporation of a Public Company

The incorporation procedure for a public company closely follows that of a private company, with
additional requirements to ensure compliance with the Companies Act. Specifically, the public company
must meet the minimum requirements for the number of members and directors, as prescribed by the
Act. The company’s Articles and Memorandum of Association must be drafted to adhere to these
requirements. Furthermore, the company's name must end with the word "Limited," and any
entrenchment clauses included in the articles must comply with the Act.

Process of Incorporation of a One Person Company (OPC)

Section 2(62) of the Companies Act, 2013 defines a "One Person Company" (OPC) as a company with
only one member. OPCs are considered a type of private company under Section 2(68) and Section
3(1)(c) of the Act.

Eligibility and Requirements:

1. Eligibility for Incorporation: Only a natural person who is an Indian citizen and a resident in India
can incorporate an OPC. "Resident in India" means a person who has stayed in India for at least 120
days during the immediately preceding financial year.
2. Nominee Requirement: The sole member must nominate a person, who must also be an Indian
citizen and resident, to become a member in the event of the member’s death or incapacity. This
nomination must be consented to by the nominee and is to be recorded in Form INC-3. The
nominee’s name and consent must be included in the memorandum of the OPC and in Form INC-32
(SPICe+).
3. Restrictions: A natural person can only be a member of one OPC at a time and cannot be a nominee
for more than one OPC. No minor can be a member or nominee of an OPC or hold shares with
 beneficial interest. An OPC cannot be incorporated or converted into a company under Section 8 of
the Act, nor can it carry out non-banking financial investment activities, including investments in the
securities of other corporates.

Incorporation Process:

1. Nomination and Consent: Obtain the written consent of the nominee.

2. Form Submission: Submit Form INC-32 (SPICe+) for incorporation, which includes details of the
nominee and their consent in Form INC-3.
3. Additional Requirements: Ensure that the memorandum and articles of association are filed along
with the application for incorporation. Pay the applicable fee as provided in the Companies
(Registration offices and fees) Rules, 2014.

This streamlined process ensures that the OPC complies with legal requirements while establishing a
single-member company structure.

Process of Incorporation of Nidhi

1. Nature of Company: A Nidhi must be a public company with a minimum paid-up equity share
capital of ₹10 lakh.

2. Restrictions on Issuance: Nidhis are prohibited from issuing preference shares, debentures, or
any other debt instruments. If preference shares were issued before the commencement of the
Companies Act, 2013, they must be redeemed according to their terms of issue.

3. Objects of the Company: A Nidhi's Memorandum of Association may only include the objects of
cultivating thrift and savings among its members, receiving deposits from, and lending to its
members for mutual benefit.

4. Name Requirements: Every Nidhi must have "Nidhi Limited" as part of its name.

5. Amendment Rules (2022): Under the Nidhi (Amendment) Rules, 2022, a public company
seeking to be declared as a Nidhi must submit an application in Form NDH-4 along with the
required fee. The Central Government will review the application and, if satisfied that the
company meets the necessary requirements, will notify the company as a Nidhi in the Official
Gazette. Prior to this amendment, a public company could be incorporated directly as a Nidhi by
the Registrar without this additional approval process.

Requirements for Minimum Number of Members and Net Owned Funds

1. Filing Requirements: Every Nidhi must file the following within 120 days from incorporation:

 E-form NDH-4
 Net Owned Funds of ₹20 lakh or more
 Minimum of 200 members
 Unencumbered term deposits of at least 10% of outstanding deposits
 Ratio of Net Owned Funds to deposits not more than 1:20

2. Definition of Net Owned Funds: Net Owned Funds comprise the aggregate of paid-up equity share
capital and free reserves, minus accumulated losses and intangible assets as per the last audited
balance sheet. Proceeds from preference shares are excluded from this calculation.

3. Non-compliance and Extension: If a Nidhi fails to comply with the above requirements:
 Apply to the Regional Director in Form NDH-2 within 30 days from the end of the first financial year
for an extension.

 The Regional Director may extend the period up to one year from the application date.

4. Penalties and Restrictions: If non-compliance continues beyond the second financial year:

 The Nidhi cannot accept further deposits until it meets the requirements and is declared as a Nidhi
under Section 406.

 The company will be subject to penal consequences as per the Act.

Return of Statutory Compliances by Nidhi

1. Filing Requirements:
o Within 90 days from the end of the first financial year after incorporation, and where applicable, the
second financial year, Nidhi must file a return of statutory compliances in Form NDH-1.
o This form should be filed with the Registrar and certified by a company secretary, chartered
accountant, or cost accountant in practice.
o The applicable fee is as specified in the Companies (Registration Offices and Fees) Rules, 2014.
o Note: This requirement does not apply to companies incorporated after the commencement of the
Nidhi (Amendment) Rules, 2022.

General Restrictions or Prohibitions for Nidhi

1. Business Restrictions:
o Nidhi shall not:
 Carry on the business of chit funds, hire purchase finance, leasing finance, insurance, or acquire
securities issued by any body corporate.
 Issue preference shares, debentures, or any other debt instruments.
 Open current accounts with its members.
 Acquire or purchase securities of any other company or control the composition of the Board of
Directors of any other company.
 Engage in any business other than borrowing or lending in its own name, although it may provide
locker facilities on rent if the rental income does not exceed 20% of its gross income in a financial
year.
2. Deposit and Loan Restrictions:
o Nidhi shall not:
 Accept deposits from or lend to any person other than its members.
 Pledge any of the assets lodged by its members as security.
 Take deposits from or lend money to any body corporate.
 Enter into any partnership arrangement in its borrowing or lending activities.
3. Advertising and Incentives: Nidhi shall not:
 Issue or cause to be issued any advertisement for soliciting deposits. Private circulation of fixed
deposit scheme details among members with the phrase “for private circulation to members only”
is not considered advertising.
 Pay brokerage or incentives for mobilizing deposits from members or for deploying funds or
granting loans.
4. Borrowing Restrictions: Nidhi shall not raise loans from banks, financial institutions, or any other
sources for advancing loans to its members.

Process of Incorporation of Section 8 Company

The incorporation process for a Section 8 company differs from that of private or public companies and
involves the following two main steps:

1. Obtaining a Licence under Section 8(1) of the Companies Act, 2013

2. Obtaining a Certificate of Incorporation

Initial Considerations

Before forming the company, the promoters should decide on:

 The proposed name of the company

 The objects to be carried out by the company
 The proposed registered office address
 The authorized capital
 The number of promoters, directors, and the number of shares to be subscribed by each
promoter

Name and Object Requirements

Name:

o The name should align with the principal objects of the company as stated in the Memorandum of
Association (MOA).
o The name should not fall under undesirable names as per Rule 8 of the Companies (Incorporation)
Rules, 2014.
o The name must include terms like Foundation, Forum, Association, Federation, Chambers,
Confederation, Council, Electoral Trust, etc.
o There is no requirement to add "Limited" or "Private Limited" to the name.

Steps for Incorporation

1. Director Identification Number (DIN):Ensure all proposed directors have a valid DIN. If not, apply
for and obtain the DIN.
2. Digital Signature: Obtain a digital signature for at least one of the directors to sign the e-forms
electronically.
3. Drafting MOA and AOA:
o Memorandum of Association (MOA): Must be in Form INC-13 and should outline:
 The objects of promoting commerce, art, science, sports, education, research, social
welfare, religion, charity, environmental protection, or similar.
 The intention to apply any profits or income towards promoting these objects.
 The prohibition of dividend payments to members.
o Articles of Association (AOA): Must be in Form INC-31.
4. Incorporation Provisions:
o Subscribers:
 Minimum of 2 subscribers for a private company.
 Minimum of 3 subscribers for a public company.
o Directors:
 Minimum of 2 directors for a private company.
 Minimum of 3 directors for a public company.
 Maximum of 15 directors; exceeding this number requires a special resolution.
 At least one director must have stayed in India for not less than 182 days during the
financial year.
Application for Incorporation of a Section 8 Company

The incorporation process for a Section 8 company can be completed through a single eForm SPICe+,
which integrates multiple functions, including:

 Reservation of the company name

 Incorporation of the company
 Application for allotment of DIN (Director Identification Number)
 Application for PAN (Permanent Account Number)
 Application for TAN (Tax Deduction and Collection Account Number)

Note: For Section 8 companies, e-MOA (INC-33) and e-AOA (INC-34) are not applicable. Physical copies
of the MOA and AOA must be attached with the SPICe+ form.

Procedure: Filing eForm SPICe+:

Attachments:

1. Memorandum of Association (MOA)

2. Articles of Association (AOA)
3. Declaration by a professional in Form INC-14 (confirming that the MOA and AOA comply with
Section 8 and related rules)
4. Declaration by each applicant in Form INC-15
5. Declaration by First Directors and Subscribers
6. Address proof of the subscribers
7. Identity proof of the subscribers
8. Estimate of future annual income and expenditure for the next three years, specifying income sources
and expenditure objects
9. Verification of the registered office filed in Form INC-22, including:
 Registered document of the title of the premises
 Notarized copy of lease or rent agreement
 Authorization from the owner or authorized occupant of the premises
 Proof of utility services at the premises (telephone, gas, electricity, etc.)
10. Appointment of directors in Form DIR-12, with attachments:
 Consent to act as Directors in Form DIR-2
 Affidavit by Directors for not accepting deposits (on non-judicial stamp paper of Rs. 100,
duly notarized)
 Declaration by each subscriber to the MOA in Form INC-9 (on non-judicial stamp paper
of Rs. 100, duly notarized)
11. AGILE-PRO-S form is applicable for the incorporation of Section 8 Companies.
2. Issuance of Certificate of Incorporation:
o Upon satisfying the Registrar of Companies that all requirements under the Companies
Act, 2013 have been met, a Certificate of Incorporation is issued.
o The certificate includes a unique Company Identification Number (CIN) and the license
issued by the Central Government.

The streamlined process under SPICe+ aims to simplify the incorporation of Section 8 companies,
reducing the need for multiple separate applications.