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Incorporation of WOS through SPICe Forms

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Incorporation of WOS through SPICe Forms

The article enumerates the changes in the Provisions of Companies Act, 2013 as on date in respect of incorporation of a “Subsidiary of a Company Incorporated Outside India or Wholly Owned Subsidiary (WOS) of a Company incorporated outside India. The (i) Provisions of the Act (ii) Step Wise Process of Incorporation of Company (iii) FAQ’s on Incorporation of Company. (iv) clarity on Notary or Apostil of Documents. This Editorial includes the “Simplified Proforma for Incorporating Company Electronically SPICE” Scheme of Company Incorporation.

INCORPORATION OF COMPANY

With the new schemes called SPICE, questions arise as to what is the information needed to incorporate a WOS, what documents are needed, which of these documents needed to notarized/ Apostilled, what is the process and how can one go about incorporating. The below mentioned article is an attempt to answer those questions.

PROCESS OF INCORPORATION

STEP – I: Apply for Name Approval:

Before application for name approval, the foreign Company has to choose a name for the company and the basis for such choice is:

  1. a) In case of Subsidiary or WOS, the foreign Company can use coin word of its name for Incorporation of Company in India to take the Benefit of Its goodwill in foreign County.
  2. b) 1Foreign Company can apply the same name (name in foreign country) in India by using word “India” in its name.

If a foreign company is incorporating its subsidiary company in India, then the original name of the holding company as it is may be allowed with the addition of word India or name of any Indian state or city.

  1. c) If foreign Company having any registered Trade Mark then it can use such trademark for Incorporation of Company in India.
  2. d) Any other name as decided by the Foreign Company.

While selecting the name for the WOS what are the documents or information that is needed?

  1. In case of Foreign Company using Its “Coin” word or “Trademark” following Documents / information would be mandatorily required:
  • NOC from the Foreign Company to use the ‘Coin’ word or ‘Trademark” in the form of Resolution.
  • Apostilled copy of Charter of Foreign Company (translated in English language).
  • Such resolution shall be apostilled in foreign Country.
  • In case of use of Trademark – copy of trade mark registration documents.

STEP – Process of Name Approval

Login on MCA Website

Applicant have to login into their account on MCA Website. (Pro-existing users can use earlier account or new users have to create a new account.)

After Login use have to click on the icon “SPICE” in MCA Service. An online form shall be open. Applicants have to fill the information online. (This form can’t be download)

Note* since 26th January, 2018 e-form INC-1 has been omitted from the Companies Act, 2013.

  1. Details required to be mentioned in online form:

(i) Entity type (i.e. Normal Company, Section 8 Company etc.)

(ii) Proposed name (Auto Check Facility)

(iii) Comment (Mention Objects of the proposed Company and any other relevant information Like Trade Mark etc.)

  1. Choose File:

This option is available to upload the PDF documents. Like:

  1. Apostille copy of Resolution of Foreign Company
  2. NOC, if Required

iii. Trade Mark resignation Documents, if required.

  1. Submission of Form on MCA Website:

After completion of above steps user shall submit the Form with MCA website.

  1. Payment of Fees:

There is no option of pay later challan in RUN. Applicant has to pay fees immediately after submission of form. After payment a receipt would be generated.

  1. Validity of Reserved Name:

Reserved name shall be valid for 20 days from the date of approval of Name.

FEATURE – RUN

  1. Digital Signature Certificate (DSC) & Director Identification Number (DIN) not required for filing of RUN form for reservation of Name. Only account of MCA portal is mandatory.
  2. No Re submission of application is allowed in case of reservation of Name. The
    application shall either be Approved or Rejected.
  3. Reserved name shall be valid for 20 days in case of allotment of name for New Company
  4. Only one Name can be mentioned in SPICE form. (Earlier INC-1 allowed 6 names according to the preference).
  5. Fees payable shall be Rs. 1,000/-

NOTE: * Approval of Name through “RUN” is an optional way. Companies can also directly apply for the Name in SPICE form.

STEP – II: Information/ Documents required from foreign Company

  1. a) Apostille / Notarized copy of resolution of foreign Company ‘mentioning the name of authorized representative, no. of subscription of shares’.
  2. b) Apostille/ Notarized copy of ID Proof of authorized representative, if such person is non – resident of India.
  3. c) Apostille/ Notarized copy of Charter of Foreign Company.
  4. d) Name of one Resident Director.
  5. e) Name of Nominee (in case of incorporation of WOS)

STEP – III: Preparation of Documents for Incorporation of Company:

After approval of name or for Incorporation of Company applicant has to provide the following:

  • Memorandum of Association of Company (Physical copy of MOA should be prepared; e-MOA (INC-33) will not be accepted).
  • Article of Association of Company (Physical copy of AOA should be prepared; e-AOA (INC-34) will not be accepted).
  • INC-9 Affidavit/declaration by first subscriber(s) and director(s) (duly apostilled or notarized in the country of origin).
  • DIR-2 declaration from first Directors along with Copy of Proof of Identity and residential address. (Duly apostilled or notarized in country of origin).
  • Declaration from the foreign subscribers in respect of not having Permanent Account Number (PAN). (Duly apostille or notarized in country of origin)
  • No Objection Certificate (NOC) from the owner of the property.
  • Proof of Office address (Conveyance! Lease deed! Rent Agreement etc. along with rent receipts);
  • Copy of the utility bills (not older than two months)
  • In case of subscribers/ Director does not have a DIN, it is mandatory to attach: Proof of identity and residential address of the subscribers (Duly apostilled or notarized in country of origin)
  • DSC of at least one subscriber.
  • DIR-2 from the Resident Director along with self-attested copy of PAN and resident

At this point it would be good to answer the question as to why foreign Company can’t use e-MOA & e-AOA for incorporation of Subsidiary or WOS in India?

Foreign Company can’t use e-MOA & AOA, because as per Rule 13(5) Company (Incorporation) Rules, 2014 MOA & AOA signed by person resident outside India should be apostilled or notarized before the notary public of country of his origin.

  1. Whether ID proofs of foreign subscribers required being Apostilled & Notarized by pubic notary from the country of origin?

ID proof of Authorized representative of foreign Company / nominee of foreign company is required to be apostilled in the country of origin, if such person is not citizen of India.

iii. How many Digital Signatures are required in case of incorporation of Subsidiary/ WOS of foreign Company?

Only one Digital Signature shall be affixed only on SPICE “INC-32” form. There is no need to affix DSC on the subscriber sheet of MOA / AOA as the physical MOA / AOA is used for the Incorporation of Company.

  1. In what situations would the documents of the foreign subscribers not required to be Apostilled?

As per Rule 13(5) if foreign subscriber is present in India on “Business Visa” then such documents are not required to be apostille.

  1. If foreign subscriber is present in India on VISA other than Business Visa and has signed the documents in India, whether such documents still require to be apostilled or notarized in the country of origin?

Since foreign subscriber is present in India and has signed the documents in India but in the absence of a Business Visa such documents are mandatorily to be apostille and notarized in the country of origin.

STEP – IV: Fill the Information in Form:

Once all the above-mentioned documents/ information is available the applicant has to fill the information in the e-form “Spice” INC-32.

Features of SPICe (inc-32) form:

  • Maximum details of directors are TWENTY (20).
  • Maximum THREE (3) directors are allowed for filing application of allotment of DIN while incorporating a Company.
  • Name of Company process can be done in this form.
  • Affix physical apostilled/ notarized copy of MOA in the Form.
  • Affix physical apostilled/ notarized copy of AOA in the Form.
  • Applying for PAN / Tax deduction Account Number (TAN) will be compulsory for all fresh incorporation applications filed in the new version of the SPICe form.
  • In case of companies incorporated, with effect from the 26th day of January, 2018, with a nominal capital of less than or equal to rupees ten lakhs or in respect of companies not having a share capital whose number of members as stated in the articles of association does not exceed twenty, fee on INC-32 (SPICe) shall not be applicable

STEP – VI: Submission of INC-32,33,34 on MCA-:

Once Spice forms are ready with the applicant, upload the form on MCA website and payment needs to be made.

STEP – VII: Certificate of Incorporation-:

Incorporation certificate shall be generated with Company Identification Number, Permanent Account Number & Tax deduction Account Number.

POST INCORPORATION

Step –I: Open Bank Account to receive Subscription Money.

Step –II: Receipt of Subscription Money from Foreign Subscriber.

Step -III: Collect Foreign Inward Receipt Certificate (FIRC) from the Bank as per Foreign Direct Investment (FDI) Guidelines.

Step IV: Issue Share Certificate to the subscribers.

Step V: File Form FC-GPR with Authorized Dealer as per FDI Guidelines.

 

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, we assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of all applicable laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. We assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL WE BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION IN THIS ARTICLE.

 

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