The Companies (Incorporation) fourth Amendment Rules,2016
A company comes into existence through a process of incorporation. A company which has been legally incorporated becomes a distinct entity. The basic procedure for incorporation of a company under the Companies Act, 2013 includes a) obtaining Digital Signatures, b) obtaining Directors Identification Number, c) name availability for the proposed company, d) preparation of Memorandum of Association (MOA) and Articles of Association (AOA).
However, The Companies (Incorporation) Rules,2014, herein after called as the “Principal Rules” which came into force on the 1st day of April, 2014 gives an insight on the substantive and procedural aspects on the Companies Incorporation.
The Ministry of Corporate Affairs vide notification dated 1st October 2016 has issued Companies (Incorporation) fourth Amendment Rules, 2016, herein after called as the “Rules” to amend the “Principal Rules”. As per the “Rules” the incorporation process becomes much easier. The details of the said Amendment are as follows:
Conversion of a Public limited company into private limited company or vice versa
- For effecting the conversion of a private company into a public company or vice versa, the application shall be filed in Form No.INC.27 with fee. However, Form No.INC 27 is substituted with some changes.
- A copy of order of the Tribunal approving the alteration of articles shall be filed with the Registrar in Form No.INC-27 with fee together with the printed copy of altered articles within fifteen days from the date of receipt of the order from the Tribunal 1
SPICE (Simplified Proforma for Incorporating Company Electronically) 2
- SPICE is an integrated process for incorporation of a company of through e-forms No. INC 32, INC 33 (MOA) and INC 34 (AOA). Earlier MOA and AOA were drafted in a word format and were attached with e-Form INC 29.
- The MOA and AOA will be filed as e-forms except for Section 8 Companies.
- With effect of e-MOA and e-AOA only digital signature needs to be affixed in subscriber and witness columns.
- This facility is applicable until adding 7 subscribers. In case if the number of subscribers exceed 7, the old procedure is to be followed.
- INC 29, INC 30, INC 31 shall be substituted with e forms INC 32, INC 33, INC 34 respectively.
Conversion of a company limited by guarantee into a company limited by shares 3
Conversion procedure is applicable for a company other than a company registered under Section 25 of the Companies Act, 1956 or Section 8 of the Companies Act,2013. The following is the procedure for the same:
- The company seeking conversion shall have a share capital equivalent to the guarantee amount.
- A special resolution is passed by its members authorizing such a conversion omitting the guarantee clause in its Memorandum of Association and altering the Articles of Association to provide for the articles as are applicable for a company limited by shares.
- A copy of the special resolution shall be filed with the Registrar of Companies in Form No.MGT-14 within 30 days from the date of passing of the same along with fee as prescribed in the Companies (Registration Offices and Fees) Rules,2014.
- An application in Form No.INC 27 shall be filed with the Registrar of Companies within 30 days from the date of the passing of the special resolution enclosing the altered Memorandum of Association and altered Articles of Association and a list of members with the number of shares held aggregating to a minimum paid up capital which is equivalent to the amount of guarantee hither to provide by its members.
- The Registrar of Companies shall take a decision on the application filed under these rules within 30 days from the date of receipt of application complete in all aspects and upon approval of Form No. INC 27, the company shall be issued with a certificate of incorporation in Form No.INC 11B. Which shall be inserted after Form No.11A.
The Rules depict a simplified and completely digital form for company incorporation which in turn helps and increases the back-office productivity gains due to faster review of e-MOA and e-AOA by approving authorities.