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Company incorporation

Incorporation and management of companies in India has come a long way since 1956.

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Last Updated: Jul 27, 2017, 03.04 PM IST
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The Companies (Incorporation) Fifth Amendment Rules, 2016 replaced e-forms INC-7 and/or 29 along with set of other e-forms with SPICe INC-32 form series. This became effective from January 1, 2017.
The Companies (Incorporation) Fifth Amendment Rules, 2016 replaced e-forms INC-7 and/or 29 along with set of other e-forms with SPICe INC-32 form series. This became effective from January 1, 2017.
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Incorporation and management of companies in India has come a long way since 1956. The year 2013 marked a significant landmark with introduction of the new Companies Act, 2013. The idea behind this new law was to ease the process of setting up a company and providing a more transparent legal system to the new generation of entrepreneurs.

As a startup, you have two alternatives to incorporate your business organization as a company - Private Limited Company or One Person Company. Forming a public limited company, on the other hand, requires higher capital, directors, legal compliances and set up costs.{1}

Incorporation of Companies is governed by Chapter 2 of the Companies Act, 2013. The Ministry of Corporate Affairs (MCA) has introduced a new set of forms to register a company named SPICe or Simplified Proforma for Incorporating Company Electronically. MCA has been consciously focusing on easing the process of incorporation for companies to achieve their goal of improving ranks in Ease of Doing Business Report of World Bank.

The Companies (Incorporation) Fifth Amendment Rules, 2016 replaced e-forms INC-7 and/or 29 along with set of other e-forms with SPICe INC-32 form series. This became effective from January 1, 2017.

Although, as of now, you can either get incorporated through:
1.An elaborate process of filing e-form INC-7 or INC-2 (for OPC) along with other bunch of e-forms, or
2.SPICe or Simplified Proforma for Incorporating Company Electronically via e-form INC-32.

Eventually, option 1 is planned to be phased out. Therefore, in this book, we have focused only on SPICe e-form series for explaining the incorporation process.

Footnotes
{1} Private limited companies/OPC can be converted into Public limited company at any point in time as and when the business grows, hence, it's better to stay privately held till such time.
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