When setting up an LLP company it is imperative that one follows the proper procedure of registering the business and obtaining various unique identification numbers by which the business is registered. These numbers such as the CIN and DIN are necessary and customers should know these numbers. It is mandatory for companies to display these numbers on their invoices, bills, letterheads etc., as per section 12(3)(C) of the Companies Act.
What is a CIN number?
CIN stands for Corporate Identification Number, which is a 21-digit alphanumeric identifier given to Indian businesses once they register with the ROC in their respective states following their registration with the Ministry of Corporate Affairs. Every business registered in India is assigned a CIN, which is valid for the following types of businesses:
- Nidhi Company
- One Person Company (OPC)
- Private Limited Company
- State Government Companies
- Section 8 Companies and Others
LLP or Limited Liability Partnerships that are registered in India do not receive a CIN; instead they are provided with a Limited Liability Partnership Identifying Number (LLPIN). This is a 7 digit unique number assigned to the LLP’s by the ROC. Connect with CoffeeMug experts for effective tips on entrepreneurial journeys while connecting with a vast network of business partners.
Explanation on the 21 digit CIN
The CIN is divided into 6 sections. Each of these sections explained below has their unique significance.
Section 1 – The CIN’s first character indicates whether a company is Listed or Unlisted on the Indian Stock Exchange. In other words, the first character indicates whether or not the corporation is publicly traded.
Section 2 – This comprises a set of 5 numeric digits that categorizes a company’s economic activity or the industry to which the company belongs. This classification is done based on the kind of economic activity that the firm engages in or the industry to which the company belongs. Every category of industry has been assigned a number by the Ministry of Corporate Affairs.
Section 3 – The next two letters identify the state to which the firm belongs and is registered. For example, MP indicates that the firm is registered in Madhya Pradesh, MH is Maharashtra, KA stands for Karnataka etc.
Section 4 – The next four digits represent the year in which the firm was founded such as 1976 which means the firm was founded in that year.
Section 5 – The subsequent three letters are indicative of the kind of company it is or the company categorization. It tells us whether a firm is a private business or a public firm. If the digits are FTC it means that the company is a subsidiary of a foreign company and if it is GOI then it means that the firm is a government of India undertaking.
Section 6 – The remaining six digits are indicative of the registration number provided by the Registrar of Companies.
The importance of CIN for a company
Uniquely significant, this 21 digit CIN is easily understandable and aids in the discovery of fundamental corporate information. It is utilized especially to obtain information on companies that are registered under the MCA in the country. It is necessary to provide the CIN on all transactions with the respective Registrar of Companies and is used to trace all aspects and operations of a company beginning with its establishment by the ROC. The CIN is used to trace organizations for various levels of information that is held by the MCA or ROC and contains an organization’s identity as well as extra information about the ROC.
How to get a CIN for your company?
Once you have decided what kind of business you want to start, there are a few steps to getting your CIN given below:
- Obtain a Digital Signature Certificate (DSC)
- Procure a Director Identification Number or DIN
- Complete the new user registration
- Complete company incorporation procedure
- Incorporate company
Once this is done the MCA will assess and approve the company’s application after receiving the company’s incorporation forms. The CIN is assigned only once the information mentioned in the application has been validated.
What is a DIN number?
A DIN (Director Identification Number) is a unique eight-digit number that must be used by any current or prospective director of a corporation. Because a DIN number is unique to a person, he only has to obtain one Director Identification Number if he is a director in two or more firms. Aside from that, if he leaves one firm and joins another, the same DIN will apply to both companies.
Procedure for applying for DIN
In order to register a company in India a DIN is mandatory. Without a DIN one cannot act as director of the company. Subsequently, in order to obtain a DIN it is necessary to have a DSC as well. The DSC is obtained in the form of a USB and is valid for a period of up to two years at the max.
In order to obtain the DSC you are required to file an application for the same and this will include your signature along with a proof of identity and proof of residence. All these documents must be self attested by you. Foreign nationals must get their documents attested by their embassy and in the case of NRI’s, they will need to have it attested by the Indian Embassy.
There is a list of documents that may be acceptable for identity proof, address proof which is as follows:
- Driver’s license
- Voter ID
- Utility bills such as electricity bill
- Tax receipts such as property tax, sales tax as well as service tax
- Bank statements which have been attested
- PF statement
- PAN card of the applicant (for Indian nationals)
- Passport of the applicant (Foreign nationals and NRI’s)
Once you have obtained your DSC, it is time to go ahead and apply for your DIN. It takes up to 3 days to process the application and intimation with the DIN allotment letter is sent to the applicants to complete the process.
Difference between DIN and CIN
The CIN is not to be confused with the DIN which is the Director Information Number. This is a unique 8 digit number assigned to the director of the business and is mandatory for all communication with the Income Tax Department. This number helps maintain the track record of all directors of companies and avoid situations where directors have promised returns but have escaped with all the money to other cities or countries and have enjoyed their illegally obtained wealth.
The DIN allows the government to cross check such persons and ensure that the director’s information is both valid and true such as their name, PAN and address. In case of any change of address or any other information, it must be updated immediately.
Irrespective of the number of businesses a person floats, the DIN remains the same of a lifetime. In simple terms, DIN is specific to the individual who has obtained it and not to the company that they have obtained it for. For example, if a director of a company wants to open a new company and act as its director, they can do so using the same DIN.
All this might seem confusing and overwhelming if you are not a person who loves paperwork and is doing it for the first time. That is where you bring in the experts. CoffeeMug is an AI-powered networking platform and has successfully managed to support a number of individuals and startups by hand-holding them through the sometimes complicated process of setting up a business and adding significant value at each stage and ensuring that they have happy and satisfied customers.
Q. Is a CIN number mandatory?
A. When a business is founded, the ROC issues a Certificate of Incorporation, which includes a unique Corporate Identity Number as well as the company’s approved name. For all sorts of firms registered in India, this number is required. As a result, no business can run without a CIN.
Q. How many minimum promoters are needed for incorporating a public company?
A. A minimum of two people or promoters are required to create a public business.
Q. Why is a certificate of incorporation needed?
Because a certificate of incorporation serves as legal documentation of your company’s identification, you can take advantage of all the perks that your legal structure has to offer. These include tax advantages, indefinite existence and so on.
Q. Is Din required for LLP?
A. In any case, a person with a DIN can form an LLP. However, having only one DIN does not satisfy the registration requirement. It will necessitate the presence of at least two designated partners who are DIN holders. If this requirement is met, the rest of the procedure can be completed without difficulty.