Directors – Powers & Duties of Directors Explained

A Company is an artificial person and hence, is not capable to work on its own. As a consequence there is a need to appoint director in every Company. A Director is the person appointed to the Board of a Company. Director is responsible for management of the Company of which he is a director. Board of Directors refers to the collective body of directors who are in charge of smooth running of business.

Who can be a Director?

Managing a Business is not an easy task. Therefore there are eligibility criteria for a person to become a Director.

  • Only an Individual person can become a Director of the Company. A person other than individual is not eligible to become a director.
  • Furthermore, a minor individual cannot become director of Company as he is not eligible to obtain DIN as well as cannot file a valid consent to act as director.
  • At least one director of Company should be Resident of India.
  • Moreover the person acting as Director should be :-
    • of sound mind
    • capable to enter into a contract
    • not an insolvent person.

Powers and Duties of a Director

The Companies Act 2013 defines the powers and duties that a Director should take care of while acting on behalf of the Company. Sections 179 and 166 of Companies Act 2013 prescribes the powers and duties of a Company Director respectively.

Powers of Directors

According to Companies Act 2013, the Board of Directors of a Company has the following powers in the Company.

  • Power to make calls in respect of money unpaid on shares
  • Call meetings on suo moto basis.
  • Issue shares, debentures, or any other instruments in respect of the Company.
  • Borrow and invest funds for the Company
  • Approve Financial Statements and Board Report
  • Approve bonus to employees
  • Declare dividend in the Company
  • Power to grant loans or give guarantee in respect of loans
  • Authorize buy back of securities
  • Approve Amalgamation/Merger/ Takeover
  • Diversify the business of the Company

Duties of Directors

Board of Directors acts as agent of the Company. However while acting for Company, Director needs to take care of his duties which are as follows:-

  • To act in good faith
  • Act in accordance with the Articles of Association of the Company
  • To act so as to promote the objects of the Company
  • Act in best interest of the Company and its stakeholders
  • Exercise duties with due and reasonable care
  • To exercise independent judgement
  • Not to get involved in a situation where his interest conflicts with the interest of the Company
  • He cannot assign his office to any other person.
  • Not to achieve undue gain or advantage

FAQs

How can I obtain DIN if I wish to incorporate a company and become its director?

If you wish to incorporate a Company and become director of that Company, you can apply for DIN with SPICe+ as MCA has introduced this new integrated form for incorporation of Company with other services including allotment of DIN.

Can a Company become a Director of another Company?

A Company cannot become the director of another Company. Only an individual can become a director of a Company.

If one wants to incorporate a Private Limited Company with Four Directors, can all the four directors get DIN through SPICe+ Form?

No, all the four directors cannot obtain DIN through Form SPICe+ in this case as this form allows obtaining DIN for a maximum of three directors only. One of the Directors of the proposed Company will need to file Form DIR-3 with MCA for obtaining DIN before the incorporation of the Company.

AGILE Pro Form- Overview

Ministry of Corporate Affairs introduced the new form SPICe+. AGILE Pro (Form INC-35) is the mandatory linked form to SPICe+. A person who wishes to incorporate a company has to fill AGILE Pro along with SPICe+, MoA and AoA. In this article we will learn the significance and procedure to file Agile Pro form.


Purpose of AGILE Pro

AGILE Pro provides the service for application for following purposes:-

  • Goods and Services Tax Identification Number (optional)
  • Employees Provident Fund Organisation registration
  • Employees State Insurance corporation registration
  • Profession Tax (in case of Maharashtra)
  • Opening of Bank Account of company


Documents required for form

  • Proof of Principal place of business (if applying for GSTIN)
  • Proof of appointment of Authorized signatory for GSTN (if applying for GSTIN)
  • Identity proof of Authorized Signatory for opening Bank Account
  • Proof of Address of Authorized Signatory for opening Bank Account
  • Specimen signature of Authorized Signatory for EPFO


Details required for form

  1. Details of subscribers and directors
    • Name
    • Address
    • DIN/PAN
    • Mobile no and email address
    • Photograph
  2. State Jurisdiction (Sector/circle/ward/charge/unit)
  3. Center Jurisdiction (Commissionerate/ Division/Range)
  4. HSN Code and SAC code



Procedure to fill Agile Pro

After filling and submitting SPICe+ Part B, user can fill Agile pro form.

  1. Click on Agile Pro

    Click on Agile Pro form and start filling the details.

  2. Complete the details related to GSTN

    Select whether you want to apply for GST or not.
    Select the State jurisdiction and Center jurisdiction.
    Choose the nature of possession of the place of business and enter the appropriate proof of place which you need to attach in attachments of form.
    If you want to go for the composition scheme then select ‘yes’, otherwise ‘no’.

  3. Details related to business

    Enter the primary business activity of your business and the nature of work.
    Enter the HSN code/SAC code for the business. The description will automatically get filled.

  4. Enter the details of directors and subscribers of the business.

    You will require to fill name, mobile no, and email address. Also attach their photograph the size of which should not exceed 100KB.
    In the case of an Authorized signatory, you will also require to verify mobile no and email address by entering OTP.

  5. Enter the other details

    Enter the details police station, inspection office.
    Furthermore, select the Bank name you want to opt for the bank account of your company.

  6. Attachments

    Attach the required documents. Check the declarations and enter the date and place. Enter the DIN/PAN of Authorized Signatory.

  7. Proceed to submit

    First, click on the check button. After the check is successful, click on save. Now submit the form.

  8. Download the form

    After all the forms of SPICe+ are submitted, download all the forms.

  9. Upload and make payment

    Upload the forms on MCA portal. SRN will get generated for the forms. Now make the payment.

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FAQs

Where can one find the State jurisdiction that is required to be filled in Agile Pro?

A person can find the State jurisdiction that is required to be filled in Agile Pro from the official website of their respective State.

Which date should I enter in the Agile Pro form?

Always enter the date on which you will get the form signed and get it uploaded on the MCA site.

Is it mandatory to get the registration for GST through SPICe+ form?

No it is not mandatory to get the GST registration for your business through MCA site. However it is mandatory to get registration for EPFO , ESIC and Profession tax. It is also mandatory to get bank account open for your company through this form.

Is it mandatory to file Form INC-35 (Agile Pro) with SPICe+ Form while incorporating a Company?

Yes, it is mandatory to file the Form INC-35 with SPICe+ Form while incorporating a Company. Agile Pro is the mandatory linked Form to SPICe+.

Promoter of a Company

According to Companies Act 2013, A Promoter in Company refers to the person who:-

  • has been named in the Prospectus of the company or is identified by the company in its Annual Return.
  • directly or indirectly, has control over the affairs of the company.
  • Advises, instructs, or directs the Board of Directors of the Company.

Promoter- Meaning

A Promoter is a person who is engaged in promoting the formation and incorporation of the Company. He conceives the idea of setting up the business and took the steps for the formation of the Company. However, the persons who assist in the incorporation of the company are the Professionals and not the promoters.

Characteristics of a Promoter in Company

  1. Promoter conceives the idea for the formation of the Company.
  2. He takes all the preliminary steps for the formation of the company.
  3. A Promoter may be:-
    • Any Individual
    • Any Firm
    • Association of persons
    • A Company
  4. A Promoter is neither agent nor trustee of the Company.
  5. The promoter can be more than one person.
  6. He acts in a fiduciary position for the Company

Legal Position of a Promoter

A Promoter is neither an agent nor a trustee of the Company. He acts in a fiduciary position towards the Company. He takes steps for the formation of the Company and incurs the preliminary expenses for the Incorporation of the Company like Registration expenses, Stamp duty payment, professional fees, etc.

Functions of Promoters of a Company

  • He generates the idea for the formation of a company and explores the opportunities.
  • The promoter makes a feasibility study for the Business.
  • He drafts or gets drafted the Memorandum of Association, Articles of Association, and other required documents for the proposed company.
  • He arranges finance for the Company.
  • Promoter arranges for the Subscribers of the company.
  • He takes steps to make preliminary contracts for the proposed company.
  • He defrays preliminary expenses.
  • Promoter decides about the following
    • Name of the Company
    • Type of Company
    • Location of Registered Office
    • Amount and form of Share Capital

Rights of Promoter

  1. In the case of more than one Promoter, he has the right to recover the proportionate amount from the co-promoter if he pays the entire expenses.
  2. The promoter can enter into preliminary contracts on behalf of the company.
  3. Promoter has the right to receive remuneration. However, there must be a valid contract for remuneration.
  4. He has the right to receive legitimate preliminary expenses.

Duties of Promoter

The Promoter of a Company has certain duties and liabilities towards the Company and co-promoters.

  • The promoter should not make any secret profit from the company. However, if he makes a secret profit he should disclose them.
  • He should disclose all the material facts relating to the company.
  • Furthermore, it is the duty of the promoter to make good to the Company.
  • He must exercise due diligence and care.
  • He should not make any contract prejudicial to the interest of the proposed Company.
  • The promoter must consider the company’s interest prior to his personal interest in case any conflict arises between the company’s interests and his interests.

Remedies available to Company against Promoter

If the Company promoter acts against its duties, the Companies Act provides some remedies to Companies against the promoters. Those remedies are:-

  1. Rescission of Contract
  2. Recovery of secret profits
  3. Suit against promoter
  4. Cancel right of receiving remuneration by the promoter


FAQs

What is pre-incorporation Contract?

A pre-incorporation contract is that contract that is entered by the promoter prior to the incorporation of the company.

Is Company liable and be sued for the pre-incorporation Contract?

The company is not liable for the pre-incorporation contract as the Company was not in legal existence when the contract was made. Hence Third Party cannot sue Company for the pre-incorporation contract.
However in case the Company ratifies the contract along with the acceptance of the third party or the company novates the contract, then only Company can be held liable.

What is the difference between promoter and director?

A promoter is a person who takes steps for the formation of a company. However, the director is the person who controls the day to day affairs of the company. Both can be the same or different in a company.

Types of Companies in India

A Company is an association of persons, however, it is a separate legal entity from its owners. It is a body corporate with perpetual succession and a common seal. It can sue and be sued in its own name. There are different types of business entities in India. In this article, we will discuss the different types of companies in India.

Types of Companies in India under Companies Act 2013

The following chart shows the Company types in India on the basis of different criteria.

Companies based on the Size

  1. Public Company
    A Public company is a company in which members can freely trade the company’s shares on the stock exchange. In simple terms, it means a company that can raise funds from the public.
  2. Private Company
    A private company is a company in which there is a restriction on the transferability of shares and can raise money through private placement.
    This company has two types- small company and one person company.
    • Small Company
      A small company is a company that has a paid-up share capital of not more than 50 lakhs or such higher amount as may be prescribed but not more than 10 crores, and a turnover of not more than 2 crores or such higher amount as may be prescribed which shall not be more than 100 crores.
    • One Person Company (OPC)
      One Person Company is a company which has only one person as a member. The Companies Act 2013 had first introduced the concept of OPC. Only a resident can incorporate an OPC.

Types of Companies on the basis of Liability

  1. Limited by shares
    In this type of company, the liability of members is limited to the unpaid amount on shares which they hold in the company.
  2. Limited by Guarantee
    In such a type of company, the liability of members is limited to the extent of the guarantee amount that they agree to pay at the time of liquidation of the company.
  3. Unlimited Company
    In the case of an unlimited company, the liability of the members extends to the entire company’s debts. The personal assets of members are liable for the payment of a liability of the company.

Types of Companies on the basis of control

  1. Holding Company
    A company in relation to another company is a holding company if it:-
    • holds more than half of the total share capital of that another company, or
    • holds a position of control in that company.
  2. Subsidiary Company
    If in a company, another company directly or indirectly holds more than half of its capital or holds a position of control then we call the company a subsidiary of that holding company.
  3. Associate Company
    Associate company is the company in which another company holds more than 20% of the share capital of the company.

Types of Companies on the basis of Stock

  1. Listed company
    In the case of a listed company, the company lists its shares on the stock exchange in India or outside India.
  2. Unlisted company
    The shares of the unlisted company do not list themselves on any stock exchange, hence we call it an unlisted company.

Other Companies

  • Government Company
    A government company is a company in which the Central Government, State government, or both holds not less than 51% of the paid up share capital.
  • Foreign Company
    A foreign company is a company which is incorporated outside India but has a place of business in India.
  • Section 8 Company
    A Section 8 Company is a Non-Profit Organization under Section 8 of Companies Act 2013. It has the promotion of Arts, Science, Commerce, Sports, Education, Social Welfare, the Protection of the environment, or any other charitable activity as its main objects.
  • Nidhi Company
    A Nidhi company is a type of Non-Banking Financial Corporation. It is basically formed to borrow and lend money among its members.
  • Dormant Company
    When a company is not active or inoperative, we call it a Dormant Company.
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FAQs

I am a member in OPC. Can I incorporate another OPC and become member of it?

A person can be a member in one OPC only. If you are already a member in one OPC, you cannot become member in another OPC.

How can a dormant company get the status of active company?

A dormant company who wishes to get the status of active company has to file the application under Form MSC-4 to ROC. If satisfied with the application, ROC will issue a certificate under Form MSC-5 to the dormant company to get the status of active company.

What are the documents that one requires to register a Company India?

A person who wishes to incorporate a Company in India needs the following documents:-
1. Utility bills for Office address (not older than 2 months)
2. Stamped and Notarized Rent Agreement/ Lease Deed
3. No Objection Certificate from the owner of the place of Registered Office
4. PAN of all the directors
5. Identity Proof of Subscribers
6. Address proof of Subscribers (not older than 2 months)
7. Consent to act as Director (DIR-2)
8. Declaration by Subscriber/ Director (INC-9)

SPICe+ Form Overview

The Ministry of Corporate Affairs has introduced a new form for incorporation of companies under the Ease of Doing Business (EODB) initiative. The name of the form is SPICe+ form. The full form of SPICe is Specified Proforma for Incorporating a Company Electronically.

What is SPICe+Form?

It is an integrated web form which offers 10 services at one go thereby saving time and cost as well as simplifying the process for Starting a Business in India.

This form provides the facility for incorporation of any company including Private company, OPC, Producer company, Unlimited company, Section 8 company, Nidhi company or any other company.

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Features of SPICe+ Form

  • SPICe+ offers 10 services in total which we split into two parts i.e. Part A and Part B.
    • The part A provides a person with the facility for reservation of name for his new company.
    • Part B offers the other nine services which are as follows:
      1. Incorporation of company
      2. Allotment of DIN
      3. Allotment of PAN of the Company
      4. Registration for EPFO
      5. Allotment of TAN of the company
      6. Registration for ESIC
      7. Profession Tax Registration (Maharashtra)
      8. Opening of Bank Account for the Company
      9. Allotment of GSTIN for the company

Forms for Incorporation of Company

The person who wishes to incorporate a Company needs to fill and upload following forms:-

  1. SPICe+ Part A (Reservation of Name)
  2. SPICe+ Part B
  3. Agile Pro Form
  4. SPICe MOA
  5. SPICe AOA
  6. INC-9 (Autogenerated)

Major Updates after the Introduction of SPICe+ Form

  • The SPICe+ form has replaced the old SPICe form for the incorporation of companies.
  • Furthermore, the AGILE Pro form has replaced the AGILE form through which the company needs to apply mandatorily for EPFO/ESIC/Bank Account at the time of filing the SPICe+ Form for the company.
  • The registration of EPFO and ESIC has become mandatory for companies incorporated on or after 15th February 2020.
  • Furthermore, the companies are also required to open a bank account through the AGILE-PRO form.
  • In case the total numbers of subscribers are less than 20 and have DIN or PAN the declaration of INC-9 will be auto-generated and will be uploaded with other linked forms in SPICe+.

Documents Required for SPICe+ Form

The Form SPICe + and its linked forms for incorporation of Company requires different attachments.

Attachments for SPICe+ Part B

  • Utility bills copy for office address (not older than 2 months)
  • Notarized and Stamped Rent agreement/ Lease Agreement for Registered office of Company (in case applicable)
  • NOC from the owner of the property
  • PAN of each Director (Mandatory)
  • Proof of identity of subscribers and directors (Passport/ Voter ID/Driving license)
  • Address Proof of subscribers and directors (Bank Statement/Electricity bill/ Mobile bill/ Telephone bill)- not older than 2 months
  • Proof of identity and address of Applicant I, II, III in case applying for DIN for directors
  • The interest of director in other entities along with the name and CIN/LLPIN/FCRN of an entity, designation, amount, and percentage of holding (in case the director has an interest in other entity)
  • Consent to act as director (DIR-2)
  • Declaration by first director(s) and subscriber(s) (INC-9)
  • Consent of Nominee (in case of OPC)

Attachments in Agile Pro Form

  • Proof of Office Address for GSTN
  • Proof of appointment of Authorized signatory for GSTN (in case applying for GST)
  • Specimen signature of Authorized signatory for EPFO
  • Proof of Identity of Authorized Signatory
  • Proof Of Address of Authorized Signatory
  • Photos of all the directors (Size up to 100KB)
Always check the size of your Incorporation Forms before uploading on MCA Portal. The size of any form of Incorporation should not exceed 6 MB. In case the size exceeds, forms will not be accepted by MCA.
Tip
Always check the size of your Incorporation Forms before uploading on MCA Portal. The size of any form of Incorporation should not exceed 6 MB. In case the size exceeds, forms will not be accepted by MCA.

Details required

  1. Company’s proposed names in the order of preference
  2. Correspondence and Registered office of the company
  3. Capital Structure of Company
  4. Contact Details of the company (contact no, email id)
  5. Names of directors (minimum 2 having valid DSC)
  6. Details of directors and subscribers
    • Father’s name
    • Address (present and permanent)
    • DIN/PAN/CIN
    • Date of Birth
    • Contact number
    • Email address
    • Place of birth
    • Occupation
    • Educational Qualification
    • Duration of stay at current address
    • Designation and holding in the company
    • Nationality and citizenship
SPICe+ Instruction Kit
You can also refer to this Instruction Kit of SPICe+ for filing this new web based form.
Download
SPICe+ Instruction Kit
You can also refer to this Instruction Kit of SPICe+ for filing this new web based form.
Download

Procedure for Incorporation of Company through SPICe+

Lets learn how to fill and upload SPICe+ for incorporation of a Company.

  1. Login to MCA

    Login to MCA portal. Go to ‘MCA services’ and click on ‘SPICe+’.

  2. New Application

    Click on ‘new application’. However if you have already filed Part A you can choose existing application.
    Fill Part A of the SPICe+. Furthermore complete all the details for reservation of name of the proposed company including:-
    Type of company
    Class of company
    Category of company
    Sub-category of company
    Main division of industrial activity of company (description will automatically get filled according to code user chooses)
    Particulars of proposed or approved name

  3. Automatic scrutiny of name

    Click on ‘Autocheck’ button for automatic scrutiny of proposed name. Click on ‘Save’ button.

  4. Submit Application

    Submit your application for Part A by clicking on ‘Submit’ button.

  5. Name approval letter

    MCA will provide you the Name approval letter. Furthermore MCA will provide the user 20 days time period for filling other forms and uploading on MCA site.

  6. SPICe+ Part B

    Now proceed for Part B of SPICe +.

  7. Enter required details in SPICe+ Part B

    Complete the basic details regarding the company to be incorporated which shall include:-
    Capital structure of the proposed company
    Address of the proposed company
    Contact details of the proposed company (email address and contact number of company)

  8. Subscribers and directors details

    Further enter the given details for subscriber and subscribers.
    Number of first subscribers of MoA and directors of company (having DIN or not having DIN)
    Particulars of first subscribers and directors of company
    Number and amount of shares subscribed
    Interest in other entity (if any)

  9. Stamp duty

    Click on prefill button. As a result, amount of stamp duty will get prefilled according to the respective State of ROC.

  10. Issuance of PAN & TAN

    Furthermore enter the details required for issuance of PAN and TAN. You need to enter the area code for PAN and TAN of the company.

  11. Fill in the required details

    Fill your sources of income. Enter the Business/Profession code.
    Upload the mandatory attachments in the eform. In optional Attachments you can attach Form INC-9 and DIR-2 for each partner.

  12. Submit the declarations

    Finally, submit the relevant declarations and click on pre scrutiny.

  13. Submit the form

    Once the pre scrutiny is successful submit the SPICe+. Fill the other linked mandatory forms :-
    AGILE Pro
    eMOA (Charter of the company)
    eAOA (Rules and regulations)
    INC-9

  14. Download the form

    After filling all the linked forms to SPICe+, download the Spice forms.
    Get the forms signed by director and professional who certifies the forms.

  15. Upload forms and make payment

    Further upload all the linked forms in proper sequence. If the upload is successful, SRN will get generated. However in case of failure it will show error.
    Now make payment. On successful payment receipt will be generated.

FAQs

I want to incorporate a private ltd company. How many names can I propose for my new company in SPICe+ application?

If you are making application for name reservation only i.e. SPICe+ Part A, then you can submit two names. If you are filing complete SPICe+ form, then you are allowed to propose only one name for your company.

What is the difference between SPICe form and SPICe plus Form?

SPICe Form is an eform which only offered the facilty of reservation of name of the company, incorporation of company and allotment of DIN. While SPICe Plus Form is an integrated web form offering 10 services which includes name reservation, incorporation, allotment of DIN, PAN, TAN GSTIN, EPFO registration, ESIC registration Profession tax registration and opening of bank account.

How many DINs can be applied for through SPICe+ while incorporating the company?

Maximum 3 DINs are allowed to be applied through a SPICe form while incorporating a company other than producer company. In case of producer company applicant can apply for maximum 5 DINs.

I want to incorporate a private limited company. Do I need to attach MoA and AoA in the SPICe+ attachments?

As you are incorporating a private limited company, you need not attach MoA and AoA in attachments to SPICe+. MoA and AoA are required to be filled as linked forms to SPICe+ which will then be uploaded on MCA site.

I have submitted and uploaded all the forms of SPICe+ and made payment for PAN and TAN. I am not able to make the payment for Stamp duty. Status of SRN is also showing pending. What should I do?

As you have uploaded the forms and made the payment for PAN and TAN , it might take 48 hours time to clear the payment. However the forms are successfully uploaded.

Form DIR-2 : Consent to act as Director of Company

Every individual who wishes to become a director needs to provide a declaration for Appointment and Qualification in form DIR-2. Form DIR-2 is the consent to act as a director of the proposed company. It contains details of DIN/ PAN, Name, Address, Contact Details, Occupation Details of each director of a company. It is a mandatory attachment while filing SPICe INC-32 on MCA Portal.

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Form DIR-2 – Director Consent : Information required

The following information of the director is reported in Form DIR-2:

  • DIN / PAN of the director,
  • Full Name,
  • Father’s Name,
  • Address,
  • Email,
  • Mobile Number,
  • Nationality,
  • No. of companies in which the director is involved,
  • Particulars of Membership in case of professionals.

Who needs to attach DIR-2?

All the proposed companies should attach Form DIR-2 while filing SPICe INC-32 on MCA Portal. Individuals who wish to act as a director of the proposed company needs to provide DIR-2.

Only Directors of the proposed company needs to provide DIR-2. First Subscibers need not provide DIR-2
Tip
Only Directors of the proposed company needs to provide DIR-2. First Subscibers need not provide DIR-2

Notarized and Apostilled DIR-2 is only required in case of NRI Director.

Form DIR-2 – Director Consent

When to attach Form DIR-2?

DIR-2 needs to be filed as an attachment to SPICe INC-32. Hence it needs to be signed by the director before the filing of SPICe INC-32.

Download DIR-2 - Director Consent
Download Consent Form DIR-2
Download
Download DIR-2 - Director Consent
Download Consent Form DIR-2
Download

Steps to Attach DIR-2

Since this is an attachment of SPICe INC-32. You first need to gather Declaration from all the Directors of the company. Create a single PDF file of the same. And follow the below steps.

  1. Open SPICe Form INC-32

    Open the SPICe Form INC-32 – form for incorporation of company

  2. Navigate to Attachments

    Go to Attachments, click on Attach against Declaration by first subscriber(s) and director(s)

Make sure to optimize the size of the PDF file. Since there is a limitation of 6MB for each form uploaded on MCA Portal
Tip
Make sure to optimize the size of the PDF file. Since there is a limitation of 6MB for each form uploaded on MCA Portal

FAQs

Are the documents required to be Notarised and Apostilled for the incorporation of a company in case of an overseas Subscriber and Director?

The documents has to notarize before the Notary of such country and the certificate of the Notary shall be authenticated by a Diplomatic or Consular Officer empowered in this behalf under Section 3 of the Diplomatic and Consular Officers Act, 1948. attested by Public Notary and authenticated by the Indian Embassy in the country of residence.

Is it mandatory to appoint a Resident Director in a Company?

Yes, there is a mandatory requirement to appoint at least One Resident Director in a Company. Section 149(3) of the Companies Act. 2013 states that every company should have at least one director who has stayed in India for a total period of not less than 182 days in the Financial Year.

Form INC-9 : Declaration by Subscriber / First Director

While filing SPICe INC-32 form for incorporation of a company, Form INC-9 for declaration by Subscriber / First Director of a company needs to be attached. It is a mandatory attachment while filing SPICe INC-32 on MCA Portal. This declaration contains the following information:

  • Name of Proposed Company,
  • Declaration regarding the Correctness of Information Provided in SPICe Form,
  • Name of the Subscriber/ First Director,
  • Declaration regarding No Conviction or Offence Registered under Companies Act, 2013
  • Declaration regarding No Fraud or Misfeasance Committed under Companies Act, 2013
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Who needs to attach INC-9?

Form INC-9 needs to be attached by all the proposed companies while filing SPICe INC-32. Following individuals needs to provide INC-9:

  • All the subscribers of the new company,
  • All the First Directors of the new company.
Only declaration by first subscribers and directors in INC-9 is mandatory. Affidavit is NOT required to be filed.
Tip
Only declaration by first subscribers and directors in INC-9 is mandatory. Affidavit is NOT required to be filed.

Notarized and Apostilled INC-9 is only required in case of NRI Subscriber/ First Director.

Form No. INC-9 – Subscriber Declaration

When to attach Form INC-9?

INC-9 needs to be filed as an attachment to SPICe INC-32. Hence it needs to be prepared and signed by subscriber/ first director before the filing of SPICe INC-32.

Draft Form No. INC-9
Downlaod Declaration in Form No. INC-9
Download
Draft Form No. INC-9
Downlaod Declaration in Form No. INC-9
Download

Steps to Attach Form INC-9 – Subscriber Declaration

Since this is an attachment of SPICe INC-32. You first need to gather Declaration from all the Subscribers and First Directors of the company. Create a single PDF file of the same. And follow the below steps.

  1. Open SPICe Form INC-32

    Open the SPICe Form INC-32 – form for incorporation of company

  2. Navigate to Attachments

    Go to Attachments, click on Attach against Declaration by first subscriber(s) and director(s)

Make sure to optimize the size of the PDF file. Since there is a limitation of 6MB for each form uploaded on MCA Portal
Tip
Make sure to optimize the size of the PDF file. Since there is a limitation of 6MB for each form uploaded on MCA Portal

FAQs

Is filing Affidavits mandatory while filing form INC-9?

Affidavits as per Section 7(1)(c) of the Companies Act, 2013 is not required. Only declaration by the first subscriber(s) and director(s) in form INC-9 is mandatory.

What are the changes made in form INC-9?

Declaration by the subscribers and the first directors in INC – 9 shall now be auto-generated in PDF format and submitted electronically.

How would form INC-9 be generated?

INC-9 shall be auto-generated in pdf format and would have to be submitted only in electronic form in all cases, except where:
(i) Total number of subscribers and/or directors is greater than 20 and/or
(ii) Any such subscribers and/or directors has neither DIN nor PAN

SPICe Form (INC-32) : Incorporation Form for Company

SPICe INC-32 is a single application form used for Incorporation of Company in India. The full form of SPICe is Simplified Proforma for Incorporation Company Electronically. This is a linked form. And it needs to be filed with e-MOA (SPICe INC – 33) and e-AOA (SPICe INC – 34). You can use SPICe INC – 32 for the following purposes:

  • Reservation of Name for New Company,
  • Incorporation of a New Company,
  • Application for Allotment of DIN,
  • Application for PAN and TAN of a company.

You can also reserve name through RUN. We suggest applying for name reservation through RUN rather than applying in SPICe INC – 32. Since it is easy to reserve name through RUN and it stays reserved for 20 days.

Who can use SPICe INC-32 for Company Incorporation

Following Type of Companies can use SPICe form for incorporation:

  • Private Limited Company (PLC),
  • Public Company,
  • One Person Company (OPC),
  • Section 8 Company,
  • Producer Company,
  • Part I firm to Company,
  • Part I LLP to Company,
  • Nidhi Company,
  • Part I Others,
  • Part I Section 8 Company.

Information Required to file SPICe INC-32 for Company Incorporation

  • Company Information: Type of the company, Class of the company, Category and Sub-Category of the company, Capital Structure of the company, Address of the company, etc.
  • Director Details: Name, PAN, Address, Date of Birth, Education Details, Proof of Identity and Proof of Address, etc.
  • Stamp Duty Details: Amount of stamp duty paid, Mode of Payment, Date and Place of Stamp Paper, Registration number of vendor, etc.
  • PAN and TAN Application Details: Area Code, AO Type, Range Code and AO No.
  • EPF / IEC Registration Details: It is not mandatory. Type of Unit, No. of Employees, Type of Act Applicable, etc.
  • Investment Details: It is not mandatory. Details of Land, Building and Plant and Machinery and amount proposed to be invested in it by incorporating company.

Steps to file SPICe INC – 32 on MCA Portal

  1. Login to MCA Portal

    Login to your account on MCA Portal with valid username and password

  2. Go to Upload e-Forms

    Click on Upload e-Forms on the right side of the screen under Home > My Workspace

  3. Click on Normal Forms and Linked Forms

    Under the option of Upload E-Forms, click on Normal Forms and Linked Forms to upload the relevant form

  4. Upload SPICe

    Click on Browse to upload saved SPICe form. This form is a linked form and needs to be filed with SPICe INC-33 and SPICe INC-34.

  5. SRN (Service Request Number)

    Once forms will be uploaded successfully, SRN (Service Request Number) will be generated. Save the SRN to make payment of form fees

Fees of SPICe INC – 32

The fees are applicable based on the capital structure of the company:

1. In case of a company having share capital:

Nominal Share Capital Fee Applicable
Up to 15,00,000 N/A
More than 15,00,000 INR. 500

2. In case of a company not having share capital:

Number of Members Fee Applicable
Up to 20 Members N/A
More than 20 Members INR. 500

And for application of PAN and TAN fees of INR. 66 and INR. 65 becomes payable with SPICe form.

Incorporation Fees Calculator
Calculate fees to register your business with MCA in India. Understand form filing fees, registration fees and stamp duty costs to incorporate your business.
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Incorporation Fees Calculator
Calculate fees to register your business with MCA in India. Understand form filing fees, registration fees and stamp duty costs to incorporate your business.
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Post Submission Process

Following are the post submission steps:

  • SRN Generation: Once you upload the SPICe forms, the system generates an SRN. Save the same to track the status of forms filed.
  • Payment Challan Generation: Once the applicant pays the form filing fees, the system generates a Payment Challan. Save the same and use it in future as Proof of Payment.
  • Email from MCA21 Administrator: Once SPICe forms are submitted. They can either be Approved or sent for Resubmission by MCA Administrator. You will receive it on your email id mentioned in the form.
  • Approval / Rejection: If SPICe forms get approve by the MCA. Then it means your company is incorporated under the Companies Act, 2013. And you will receive Incorporation Certificate with details of PAN and TAN of a company on your email id. Also, DIN will be allotted to the individuals who have applied for it via SPICe INC – 32. If SPICe forms are don’t get approve then you need to make a fresh application for incorporation of company.
  • Resubmission: If there is any discrepancy found in SPICe forms they will be sent for Resubmission by MCA Administrator. You will receive an email for the same. An email will also contain the reason for resubmission. No need to pay fees while resubmitting the forms.
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FAQs

When to file SPICe INC – 32?

SPICe form needs to be filed after filing RUN Form and before the incorporation of a company.

How many Resubmissions are permitted for SPICe forms?

Two Resubmissions are allowed under SPICe forms. Resubmission needs to be done within 15 days from the date of receipt of an email from the MCA Administrator.

What are the attachments to SPICe INC – 32?

Following are the attachments to SPICe INC – 32:
-MOA of the company,
-AOA of the company,
-Declaration by the first subscribers in INC-9 (Affidavit is not required),
-Self-attested Identity Proof and Address Proof of all new directors (DIR-2),
-Nomination Consent Form in case of OPC.

Can I claim a refund if SPICe gets rejected?

Yes. You can apply for a refund of fees paid at the time of filing of forms. Here you will require details of Payment Challan.

Can I incorporate a Subsidiary of a company incorporated outside using SPICe forms?

Yes. You can incorporate a Subsidiary of a company incorporated outside using SPICe forms. You need to select the sub-category of company as Subsidiary of company incorporated outside.

MCA : RUN (Reserve Unique Name) for Company Incorporation

MCA started an initiative to provide Ease of Doing Business in India. As a part of this initiative, MCA introduced RUN service. RUN can only be filed after you login on MCA Portal. Hence you either need to create an account on MCA Portal or Login to your MCA portal account to reserve the company name. In the process of company incorporation, apply for the name of the company through RUN service of MCA Portal.

RUN can be used for the following purposes:

  • To Reserve the name of New Company
  • To Change the name of any Existing Company
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Types of Company who can apply for name using RUN on MCA

Following are the type of companies who can use the RUN form on MCA to reserve name for Company Incorporation:

  • Producer Company,
  • Unlimited Company,
  • Private (OPC),
  • IFSC Company,
  • Section 8 Company,
  • New Company (Others),
  • Part I Section 8 Company,
  • Part I LLP to Company,
  • Nidhi Company,
  • Part I Firm to Company,
  • Part I Others.

While filing the RUN you can propose 2 names. While adding the names it is mandatory to add Suffix. Following are the suffix allowed for the above-mentioned type of companies in RUN:

Company Type Suffix Allowed Example
New Company (Others) Limited / Private Limited XYZ Limited
ABC Private Limited
Private (OPC) (OPC) Private Limited DEF (OPC) Private Limited
Producer Company Producer Company Limited GHI Producer Company Limited
Unlimited Company Unlimited JKL Unlimited
IFSC Company (IFSC) Limited / (IFSC) Private Limited / IFSC Limited / IFSC Private Limited MNO (IFSC) Limited / MNO IFSC Limited
PQR (IFSC) Private Limited / PQR IFSC Private Limited
Section 8 Company i.e, Trust Other than ‘Private Limited / Limited / (OPC) Private Limited’ STU Electoral
Nidhi Company Nidhi Limited VWX Nidhi Limited
Part I Section 8 Company Other than ‘Private Limited / Limited / (OPC) Private Limited’ ABC Education Institute
Part I LLP to Company Limited / Private Limited DEF Limited
GHI Private Limited
Part I Firm to Company Limited / Private Limited/ Unlimited JKL Limited
MNO Private Limited
PQR Unlimited
Part I Others N/A N/A

Rules to select proposed name of Company

  • Name must be unique,
  • The name shall not be identical or resemble too nearly to the name of any existing company or LLP, you can check the company name from here,
  • The name shall not be a registered trademark, you can check out the registered trademark from here.

Information Required to file RUN for Company Incorporation

  • Type of the company,
  • Two proposed names for the company,
  • The objective of the proposed company,
  • NOC for the proposed name if applicable,
  • CIN / LLPIN of the existing entity in case of a change in the name of an existing company,
  • SRN of RUN in case of Resubmission of RUN.

Steps to file RUN Form for Company Incorporation on MCA

  • Login to your account on MCA Portal
  • Go to MCA Services > Company Services > RUN (Reserve Unique Name)
  • Enter the required details and click on Submit
  • Make the payment of Rs.1000
  • Use SRN to track the status of name approval

Fees and Validity of RUN

Fees of INR. 1,000 is payable at the time of submission of RUN. An approved name is valid for a period of:

  • 20 days from the date of approval in case of a New Company,
  • 60 days from the date of approval in case of an Existing Company.

Post Submission Process

Once RUN is submitted along with fees. SRN (Service Request Number) gets generated. You can track the status of your application through the SRN so make sure to save it. Challan for payment of fees also gets generated. An email will be sent to your registered mail id once an application gets processed. An application can be approved or rejected by the MCA.

Reasons for Rejection of RUN

Rejection happens when names proposed in RUN form are found undesirable by MCA Administrator Following are the common reasons for rejection of RUN:

  • Proposed name resembles the name of an already registered company,
  • The proposed name includes the word for which Trade Mark is registered by someone else,
  • The proposed name is a name of a registered partnership firm and NOC is not attached with RUN.

In case of Rejection of RUN, you can Resubmit the RUN Form. Resubmission needs to be done within 15 days from the date of rejection of RUN.

FAQs

Who can file RUN to reserve name?

Any individual who wishes to incorporate a new company can file RUN to reserve a name. The only prerequisite is to have an account on MCA Portal. You can either create a new account or use your current account to file RUN.

I want to incorporate Private Limited Company which Entity type should I select in RUN?

You need to select the New Company (Others) from the dropdown list. And while entering name add Private Limited as a suffix.

Can I change the name of my LLP while converting it into Private Limited Company?

No. You can start the conversion of LLP into a Private Limited Company by using RUN. But the LLP name and proposed company name should remain the same.

Process for Application of DIN/DPIN

Earlier, there was Form DIR-3 to make application for allotment of DIN (Director Identification Number) or DPIN (Designated Partner Identification Number). However, MCA (Ministry of Corporate Affairs) revised the rules for allotment of DIN / DPIN and incorporation of a company or LLP. Read about the process for the application of DIN or DPIN on MCA Portal.

As per the revised rules, here is a brief summary of the process for application of DIN or DPIN on MCA Portal:

Particulars Form Name Form Description
New Company SPICe Form for Incorporation of Company
New LLP Form FiLLiP Form for Incorporation of Limited Liability Partnership
Existing Company Form DIR-3 Application for allotment of DIN i.e. Director Identification Number before appointment in an existing company or LLP
Existing LLP Form DIR-3 Application for allotment of DIN i.e. Director Identification Number before appointment in an existing company or LLP

Notes:

  1. DPIN / DIN / DSC is not required to file an application for reservation of name under the RUN Service or RUN-LLP Service on MCA.
  2. A maximum of two designated partners can apply for an application for DPIN allotment under Form FiLLiP. However, there is no limit to the number of individual partners or body corporate partners.
  3. A maximum of seven subscribers can apply for application of DIN under Form SPICe.
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FAQs

What is the use of DIN?

DIN is a unique Director identification number allotted by the Central Government. DIN is allocated to any person intending to be a Director or an existing director of a company.

How much time does it take to get DIN?

DIN registration or getting DIN number takes about 2–3 working days.

Can a director be appointed without DIN?

As per section 152(3) of the Companies Act, 2013, No person shall be appointed as director of the Company unless he has allotted DIN under section 154 of the Act.