The Companies (Incorporation) Second Amendment Rules, 2022: Everything You Need to Know

Introduction

The Companies (Incorporation) Second Amendment Rules, 2022, which alter the Companies (Incorporation) Rules, 2014, have been made public by MCA (Ministry of Corporate Affairs). The Companies Second Amendment Rules, 2022 focus on Form INC 9 and Form INC 32 (SPICe+). Here in this article there will be detailed information on the modification done by MCA on the Companies (Incorporation) Rules, 2014 for Form INC 9 (Declaration by Subscribers and First Directors) and Form INC 32 (SPICe+).

Suggested Read: Company (Incorporation) First Amendment Rules, 2022

Amendments in Company (Incorporation) Second Amendment Rules, 2022

Amendments in Form INC 9

The following person must submit a declaration in Form INC-9 according to the Companies (Incorporation) Second Amendment Rules, 2022:

1. Authorized person of Non-individual first subscriber
2. Information on first subscribers, excluding subscriber cum director
3. Details on individual first subscriber cum directors
4. Information on Directors other than first Subscriber

• Modifications to the Declaration Details of Form INC 9

The following must be declared by subscribers/directors of a company in accordance with the Companies (Incorporation) Second Amendment Rules, 2022:

1. In the previous five years, I have not been found guilty of any crimes related to the marketing, creation, or management of any companies.
2. For the previous five years, I have not been found guilty of any fraud, mismanagement, or duty breaches towards any companies under the Companies Act.
3. I am not required to obtain Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to the subscription of shares and the required documentation is enclosed or I am required to obtain Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
4. To the best of his knowledge and belief, all of the information contained in the documents submitted to the Registrar for the company’s registration is accurate, comprehensive, and true.

• Characteristics of Form INC-9

Form INC-9, a declaration by the Subscriber/First Director of a Company, must be attached when filing the SPICe INC-32 form for a company’s incorporation. The following details need to be included in this declaration:

1. Total first-time subscribers (individual and non-individual)
2. Number of first subscribers that are not individuals
3. Total number of individual first director cum individual
4. Number of all directors
5. Name of the First Subscriber Authorized for Non-Individual Subscribers
6. Income Tax Permanent Account Number (PAN)
7. Name of the First Director/Subscriber
8. Declaration on no Conviction or Offence Registered Under the Companies Act, 2013
9. Statement about No Fraud or Misfeasance Under the Companies Act, 2013

Amendments to Form INC 32 (SPICe+)

The companies must obtain government approval in accordance with the FEMA (Non-debt Instruments) Rules, 2019 before offering any securities to a company that is incorporated in or a national of a country that has a land border with India, according to the Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022.

Therefore, MCA made the following modification to Form INC-32 (SPICe+) in Part B of the Declaration via the Companies (Incorporation) Second Amendment Rules, 2022. The following paragraph needs to be inserted in Part B:

“I, on behalf of the proposed directors, hereby declare that the person seeking appointment is a national of a country that shares a land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India shall be attached with the consent. O Yes O No. (if yes is opted, a copy of the security clearance is to be attached)”.

Source: Companies Incorporation Second Amendment Rules, 2022

Bottom Line

With effect from 1 June 2022, the INC-9 form relating to Subscriber and First Director Declaration has been modified. Also, the previously indicated paragraph must now be included in Form INC 32 (SPICe+).