The ministry of corporate affairs (MCA) through a notification dated 01/10/2016, put forth the Fourth Amendment rules, 2016 for the incorporation of companies has recently introduced an E-form known as SPICe – or Simplified Proforma for Incorporating Company Electronically. SPICe, as claimed by the Ministry, simplifies the company incorporation process through a new online application form, INC-32, in addition to online application forms for Memorandum of Association (form INC-33) and Articles of Association (INC-34). However, there had been many ambiguities regarding the different points in the said simplified SPICe Forms which are not yet cleared or made transparent by the Ministry.

The Ministry of Corporate Affairs has rolled out the Forms in October, 2016 and had made the Company Incorporations mandatorily to be filed via said Forms from January, 2017 onwards but still the effort to throw light on the ambiguous areas is still not taken by the Ministry. Some of the cons of the SPICe are stated below as experienced by the Startups:


  • Ministry claimed that SPICe would be a simplified procedure to register new company incorporations as the documents required to be notarized/uploaded (INC 8, DIR 2, Affidavit, NOC – by owner of Registered Office) by the subscribers in INC 7 shall be less in that of SPICe Forms. But, there is no clarity in this area as the Form does not has any specified area for attaching the said documents whereas, the FAQ is also silent about this. Also, while filing for incorporation, Ministry expects the startups to attach the said documents as optional attachments, as they mark the incorporation for “Resubmission”, if the said documents are not attached in INC 32. Therefore, this should be clarified by the Ministry as which all the documents are expected from the applicant.


  • To simplify the registration procedure, the latest Incorporation rules states that the Residential proofs of the Directors / subscribers of the proposed entity is not required to be attached if declaration is given in INC 32 but while filing the same without attaching the said document, one receives “Resubmission” for the said incorporation. The reason stated by the Ministry expects the applicant to provide the residential proofs of the Directors / subscribers so as to verify the same.


  • One of the reasons for marking the incorporation for “Resubmission” by the Ministry stated “The place of the subscribers and witness cannot be different” as the Electronic MOA and AOA i.e. INC 33 and INC 34 respectively reads onto the Subscriber Sheet “Signed Before Me” for the Subscribers and witness. The point of logic arises here as “What if the subscribers belong to different Sates / Places.” In this scenario, from where the subscribers are expected to get the MOA and AOA attested as only One (1) witness is allowed to attest the said documents of the company. This ambiguity is a misleading one and hence it leaves the startups in confusion to where from get the documents witnessed as because, the statement of the Ministry is not at all clear in this respect. If the Ministry is expecting the startups to get the said documents witnessed from the Place of the Registered Office, then such expectations is also not made clear by the Ministry on any of its notifications or FAQ uploaded by it.


  • It seems that Ministry is not yet clear or transparent in forming the Rules/Norms to be followed for passing or marking the filings for Resubmission or rejecting the same as they land up stating different reasons at different attempts of filings. All the way a new reason is stated in every resubmission made by the applicant instead of stating all the flaws at once which could be derived, if any, at the very first filing only, so that the startups do not face complications while registering themselves.


  • The time when SPICe was introduced in the market, the Ministry came up stating that there shall be 2 chances for Resubmission for the applicant in case the filing is marked for “Resubmission”. At present, the Ministry while marking the incorporation for Resubmission is sometimes giving only a single and last chance for re-submitting the incorporation to the applicant. The said change in norms is also not officially declared to spread the news of such change which is making the incorporations difficult for startups.


  • It is also hereby seen that Ministry itself is facing troubles in clearing the confusions and implementing the SPICe Filings fully and provisionally as the Ministry helpdesk is not willing to resolve the queries / complaints raised by the applicants via “Create Ticket for Complain” over the Ministry website. Though the helpdesk claims to resolve all the complains within 48 hours, however, the complains regarding SPICe remains unanswered for weeks, even remains unresolved at times.


  • The Ministry is also silent in respect of the Refunds claimed by the applicants whose incorporation are “Rejected”. The FAQ states that “Yes, refund can be claimed” but it is silent that refund of which payment shall be allowed by the Ministry, either Fees of Forms so filed or Stamp Duty or both of it. However, while filing the Form for Refund, the Form does not has the option of claiming the Stamp Duty, so paid by the startups, for registering their entity. This implies that the refund of the stamp duty is not allowed by the Ministry which shall lead the startups bearing a loss of such stamp duty at the initial stage of their business by paying the same twice while again filing for the incorporation of their entity.


  • As the Rule states that SPICe is a linked Form and all the SPICe Forms i.e, INC 32, INC 33 (MOA) and INC 34 (AOA) is to be filed together at once. In this context, no such copy of MOA and AOA filed electronically is provided by the Ministry as Certified Charters of the Company. Only Certificate of Incorporation is issued by the Ministry on the approval of the incorporation as it was done in case of INC 7 earlier. Therefore, it requires the applicant to download the so filed MOA and AOA from “View Public Documents” of the Ministry website by paying for the said documents. This seems to be an extra burden on the applicant as the SPICe claims to be simplified on one hand by deleting the effort of preparing the MOA / AOA manually and on other hand, it requires the applicant to pay for the documents which he only had filed with the Ministry.


  • In case where there is a Foreign Subscriber is involved in the Incorporation, Ministry requires the MOA / AOA to be manually prepared, notarized and apostiled by the Foreign subscriber whereas such requirement is not mentioned anywhere in any notification or FAQ but the same was clarified by the Ministry helpdesk over call while approached by the applicant. It again leaves the applicant in confusion due to the below unexplained and unaddressed problems :

 1. The requirement of the said soft copies of MOA / AOA nullifies the requirement of filing MOA/ AOA electronically and expects to file the INC 32 as a single Form but the same is not accepted while uploading it as an error pops out that “INC 32 is a linked Form and INC 33 and INC 34 is expected to filed altogether”.

2. Such requirement of attaching soft copies of MOA / AOA is also not mentioned in INC 32 and no place for attaching the same is provided with no options to be checked for providing the same.

3. Requirement of attaching soft copies of MOA / AOA nullifies the concept of electronic filing of MOA / AOA along with the SPICe implementation to some extent as one of the major features of the SPICe is electronic filing of MOA / AOA.

4. Ambiguity also lies at the place whether it is mandatory to get the MOA/AOA apostiled in case of foreign subscribers involved as nowhere the said requirement is mentioned along with the procedure of the same.


  • SPICe also claimed to be a single shot Integrated Form by whch PAN / TAN for the entity shall also be applied and procured but it failed to fulfill this criteria too as inspite of filing the required information for PAN / TAN in the INC 32, no PAN / TAN acknowledgement or intimation is generated or issued by the Ministry. The Ministry infact remains silent on the same for not proceeding ahead the said application for PAN / TAN by not commenting anything on it. However, as per the Ministry website, the SPICe Forms are presently undergoing revision and Ministry claims that it shall be mandatory to apply PAN / TAN for the entity through new SPICe Forms while incorporating an entity.


In conclusion, although the SPICe claims to be simplified but the ambiguity and confusions present in it without clearing and addressing the same is nullifying the purpose and scope of SPICe. We expect Ministry to be more transparent and come up with a proper Revised SPICe Forms so that the startups facing the difficulties in forming their Company’s do not go through the same and Economy receives faster development through more businesses coming into market.




For more clarification contact Taxmantra.com .

Leave a Reply

Your email address will not be published.