Company Registration Archives - MUDS

CIN and Role of the RoC in Public Company Registration

Shweta Gupta — Mon, 07 Jun 2021 16:54:41 +0000

Role of the RoC in Public Company Registration

Corporate Identification Number or CIN is an exclusive identification number assigned by the Registrar of Companies (RoC). It functions in different states under the Ministry of Corporate Affairs (MCA), formed by Govt. of India. A corporate Identification Number (CIN) acts as a unique number that establishes a company’s identity. Thus, CIN is compulsory for all types of firms registered in India. No company is allowed to function without a CIN.

The number contains 21 digit alpha-numeric code given to:

Private Limited Company (PTC),
Public Limited Company (PLC),
One Person Company (OPC),
Nidhi Company,
Section 8 Company,
Producer Company,
Central or State Governments owned entities and,
Subsidiary of a Foreign Company (FTC).

This no. is given to above entities, when it acquires registration from RoC regional office’s located in states across the nation.

Corporate Identification Number

Corporate Identification Number has the following details:

Industry Code
Listing status
Incorporation Year
State Code
Registration Number
Ownership Status of Company

Corporate Identification Number is registered only for registered offices and its branches, other subsidiaries, and manufacturing units. This is used by all for any dealing or communication.

According to Section 12(3) (c) of the Companies Act every company should display CIN in the documents.

The several important documents where CIN should be shown are:

Receipts
Letterheads
Invoices
Annual Reports
All e-forms on the MCA portal
Business letters
Bill heads

Corporate Identification Number (CIN) is used to track all activities of the firm since its incorporation by the Registrar of Companies. As per RoC rules a firm is needed to give all the transaction details to the respective RoC regional office.

The CIN is of 21 digits and has its meaning, which has an easy interpretation and helps find its necessary information under MCA. This unique 21 digit can be used to track all the information which Roc and MCA holds. The CIN is also used during audits and presenting reports or any form submission under MCA.

Decoding Corporate Identification Number (CIN)

Every CIN has the same format for easy interpretation. Here is an example of the format of CIN.

‘U 12345 DL 2020 PLC 123456’

Here are the details of various digits on the Corporate Identification Number.

Listing Status

The first character reveals whether a company is listed or unlisted in the stock market. For listed companies, the CIN begins with the letter ‘L’, and if the company is not listed, it begins with the letter’ U’. In the example above: U indicates the company is unlisted in the Indian stock market.

Industry Code

The next five digits of CIN are the ROC's industry code. Every activity conducted by the firms has a 5-digit code assigned by the MCA. It is used to identify the type of company. The MCA has assigned such codes to all industries carrying out its economic activities in the country. A few examples are Private Hospitals- 85110, Real estate activities- 70200, etc.

State Code

The next two letters represent the state code for the company's registered office address. In the example: DL refers to the state code of Delhi.

Incorporation Year

The next four digits indicate the year in which the company was registered. In the example: 2020 is the incorporation year of the company.

Ownership Status of Company

The next three letters of CIN indicate the classification or type of firm. Depending on the type of the company, the following abbreviations are used in the CIN:

PTC: Private Limited Company
PLC: Public Limited Company
GOI: Government of India owned companies
NPL: Not-for-Profit License Company
ULL: PLC with Unlimited Liability
SGC: State Government-owned Companies
ULT: Private Company with Unlimited Liability.

In the example: PLC stands for Public Limited Company.

Registration Number

The CIN’s last six numeric digits indicate the unique registration number assigned to the company by the concerned ROC. In the example: 123456 refers to the registration number.

Procedure to obtain Corporate Identification Number

According to section 7(3) of the Companies Act, 2013, RoC must allot a Corporate Identification Number to only a registered company. Thus, as soon as a company is incorporated and registered, the CIN is allotted to it. It is also mentioned that there is a penalty of Rs. 1000 per day, if the firm doesn’t meet requirements mentioned and the company and its officer’s continue the default. However, the maximum penalty is limited to Rs. 1, 00, 000.

Circumstances of CIN Updation

Although ROC issues the CIN in the company’s name during registration, there are situations when the CIN must be updated. Under the following circumstances, the CIN may be changed:

In case the listing status of a firm is changed.
For a change in the industry code.
For a change in the state code.
For a change in the ownership status of the firm.
Change in the concerned Registrar of Companies.

Role of Registrar of Company (RoC)

According to Section 2(75) of the Companies Act the Registrar is defined as the person who is on the position of either an Additional Registrar, Deputy Registrar, Joint Registrar, or an Assistant Registrar. He carries the work of registering a company, and other functions as described in the Companies Act, 2013. The following sections describe the Role of the Registrar in Public Company Registration.

Registrar of Company (RoC) is a body established under the Ministry of Corporate Affairs (MCA), with its governing norms stated in section 396 of the Companies Act, 2013. The section states that the government can establish as many numbers of registration offices as it needs for Company Registration. The Act applies to all the States and Union Territories.

The objective of establishing the ROC is to carry out the Company Registration process and Limited Liability Partnership Registration. The ROC also carries out administrative work for efficient functioning of companies registered across India. There are 22 offices of RoC across Indian territories.

Functions of Registrar of Companies

Registering Companies

The primary function of the RoC is to process company and LLP registration applications.

Verification of Incorporation Documents

ROC keeps all the important documents mandated for company incorporation such as details of shareholders, details of company directors, financial reports and other annual filing of documents. This helps in keeping records of the companies.

Granting Incorporation Certificate

The RoC after successful verification of documents grants Incorporation certificates to the applicant companies. No Indian/Foreign Company Registration can be processed without the prior consent and approval through Certificate of Incorporation from RoC. An incorporation certificate acts as an essential document to establish any company in India

Resolving Winding-up Petition

RoC can file the winding-up petition for any company in the Court by itself or on the orders approved by the Central Government.

Fostering Business Environment

ROC keeps an eye on the promotion of ethical work culture for the companies registered. This helps in fostering a healthy business environment in the market.

Checking of Accounts

RoC holds the authority to conduct random checking of the accounts and documents of any company with the prior approval of the Court.

Demand Documents

If ROC detects any suspicious activities by the Company then it can demand additional documents from the particular Company.

Powers of Registrar of Companies

Company Incorporation or Registration

The RoC has the power to issue the Certificate of Incorporation during Company Registration process to an applicant. The Incorporation Certificate is a conclusive proof of the incorporation of the Company under the government's watch.

Keeping Records of Existing Companies

RoC keeps all the records of financial details and the company’s assets with itself. If it comes to RoC's notice that any debt which has been satisfied or received in part or full by the company in return of a property that has been released in part or whole or has been ceased, the RoC shall enter the details of the transection in its memorandum of the Satisfaction.The Registrar gives intimation to the Company within 3o days of making the entries.

Power to Conduct Inspection and Investigation

If on the scrutiny of the documents submitted, the RoC finds some of them unfit, then the Registrar can call for copies, paper, or any information or explanation whichever is necessary.

Further, if the information received is inadequate, the Registrar will record the reasons in writing about the Company. It may give an opportunity to the company or to its director to explain the inadequacy in information. The Registrar can also impose a fine of up to 5 Lakh Rupees.

Investigation and Seizure

The Registrar with the information submitted to it has the right to believe that books or papers of the Company related to the key managerial personnel are destroyed, altered, or tempered with.

In such a scenario, the Registrar can conduct the investigation of the requisite documents of the firm and order their seizer. This investigation and seizure procedures are ordered after obtaining prior approval from the Special Court. The Registrar must return the books after the inspection is complete.

Removal of Name of the Companies

When the Registrar observes reasonable defaults in the company, then he can order the removal of company name. Following are the grounds of removal of company names;

If it doesn't commence its business within one year from the date of incorporation.
The applicants of the memorandum have not paid the fee required for registration to the Registrar within one hundred and eighty-two days, from the date of incorporation.
If the Company has failed to start business for two consecutive financial years and has obtained the status of dormant Company.
The Registrar will send notice to the firm before taking off the name of that firm from the Register of RoC. The Registrar will ask the company to represent itself and submit all the documents within 30 days. The above provision will not apply to Section 8 Companies.

Registration of Public Limited Company

A public limited company (PLC) has its shares listed in a the public stock exchange. An individual willing to get the public limited company registration must understand the difference between the meaning of public limited company and a private limited company. For a PLC, the shares are released in the stock exchange to raise money. The offering of shares in the stock exchange for the first time by a firm is known as a primary offering. Public companies can also go for secondary offerings based on their requirements. However, these offerings are only given to a particular class of investors known as preference stockholders.

Under section 2(71) of the Companies Act, 2013, a public limited company is defined as an entity that is not classified in the class of private limited company. Additionally, the minimum paid-up share capital requirement for a public company is prescribed as per the Companies Act. A public company is also understood as an company which is not a subsidiary of any private limited company.

Usually, these forms of business entities are considered to have large infrastructural plans. Some examples of public companies include Biotechnology Companies, Infrastructure Companies, Information Technology Companies. These entities raise capital through primary and secondary issues of shares apart from securing profits.

Law Related to Public Limited Company Registration

Similar to their counterparts (private limited companies), public limited firms are regulated through Companies Act, 2013. The meaning of a public company is defined in the Companies Act. As per section 2(71) of the Act, this type of entity is not similar to the meaning of a private company. Apart from this, the share capital requirement the public company does not need to be a specific amount.

While releasing the primary issue, a prospectus is given to the public. Under section 2(70) of the Act, a prospectus is understood as a document or a notice or an invitation to the public to buy or subscribe to the shares of the entity.

Hence when the public company issues a prospectus to the public, it invites the investors from the public to subscribe to its shares. A minimum of three directors and seven shareholders are required to start a public limited company. As per the Companies (Amendment) Act of 2015, there is no requirement for a company to have a minimum share capital. When it comes to shares registration in a public stock exchange, compliance norms must be maintained. The norms are generally being laid down by the SEBI or regulatory body of the stock exchange.

To Conclude…

So, that brings us to the end of this informative piece. We understood the underlying meaning of a Corporate Identification no. We also understood the procedure and compliance requirements of CIN. In the other sections we understood the importance of Registrar of Companies and the registration procedure of the Public Limited Companies. An applicant seeking public company registration must contact a reputed legal and financial consultancy firm. These firms will assist them in the compilation of all required documents and the final registration process.

The post CIN and Role of the RoC in Public Company Registration appeared first on MUDS.

An Insight into Private Company Registration Process and Name Registration

Shweta Gupta — Tue, 18 May 2021 11:32:37 +0000

A Pvt. Ltd. Company (PLC) can only commence its operations after getting a Certificate of Incorporation from the Registrar of Companies (RoC). A Private Ltd. Company has legal protection and is indebted to its shareholders. A minimum of two directors is a must for a Pvt. Ltd. Firm. Within a Private company, an individual is often appointed as both director and shareholder. A PLC generally gets its incorporation certificate within 15 days of application.

In this text, we’ll understand the method of Company Registration as a Private Limited Company. It is a process through which all the businesses are registered from the MCA portal (Ministry of Corporate Affairs). The method is easily administered online. Registering a firm comes with many different benefits. The process is overall simple but requires several steps to be completed and thus requires expert supervision.

PLC Registration

Benefits of PLC Registration

A Pvt. Ltd. firm can have no. Of directors ranging between 2 to 50.
It is considered a separate legal entity.
Directors have limited liabilities and cannot be held responsible for the affairs of the company on a personal level.
Directors are indebted to company creditors.
In case of default, the banks and creditors can only liquidate the company’s assets and not the personal assets of the director.
The directors are allowed to avail Tax benefits as administrators.
A registered company can be sued or can sue in its name.
Registered companies generally get a far better avenue to borrow funds from creditors compared to other entities.

Checklist for PLC Registration

For Directors: A Minimum of two directors should be there with one resident director for the company.
Capital requirement: Investments of the company must be made as per business category however, there is no least capital requirement for a corporation registration.
The Company must have a unique name that should not be identical to any already existent entity.
Any Private firm must have a permanent registered office for communication.

Steps for Incorporation through PLC Registration

A corporation can be registered through the RUN form using the following procedure:

Create a simple login account and go to the registration dashboard using your login credentials.
Enter the company name which the promoters want to use and check its uniqueness using the MCA database.
If an already existing entity wants to change its name, then CIN is required for the RUN e-form.
The applicant should enter the name they want to use for the name of the corporation or for the creation of a replacement firm.
Post this the objects of the proposed company must be entered with other documents to support the proposed name registration.

Validity Period for a Reserved Name

An approved name from MCA is valid for:

For a new firm: 20 days from the approval date.
For a change of name of an existing entity- 60 days from approval date.

Steps for Pvt. Ltd. Company Registration

1. Acquire Digital Signature Certificate

The PLC registration procedure requires a digital signature certificate (DSC). As the process is online, the subscribers or directors must have a legitimate DSC of Class II or Class III standards.

2. Apply for Director Identification Number

All directors must have DINs or Director Identification Number. If they don’t possess DIN, then they must apply for their respective DIN on MCA. Without DIN directors are not allowed to work in any company.

3. Apply for Company Name Approval

The company’s name has to be submitted for approval alongside SPICe (INC-32) at the time of its incorporation. If the name is not approved, then it has to be resubmitted for consideration.

4. e-MoA (INC-33) and e-AoA (INC-34)

Earlier, during the registration process, the MoA & AoA documents were required to be filed physically by the company promoters. But now these documents are filed online on the MCA’s website. The promoters must digitally sign these documents.

5. Apply for PAN and TAN

The applicant/promoter must apply for PAN and TAN to make the filing process complete.

6. Certificate of Incorporation

MCA and RoC will verify all the submitted documents, and if satisfied, they’re going to issue a Certificate of company Incorporation to the promoters. The Certificate of Incorporation will act as a legal instrument and provides the status of the private limited firm to the company.

7. Opening of a Checking Account

After obtaining the CoI from MCA, the firm should open a checking account for all the transactions concerning the company’s name.

Documents Needed for Company Registration

Following are the documents required for company registration as a Private Firm:

For DSC (Digital Signature Certificate)

With the DSC application form, an applicant needs:

Photo of Promoter or the one seeking registration (signed across by a blue pen) of the applicant
Address proof of the company director(s)
Aadhar card
Driving license
Passport
Voter ID card
Pan Card of the applicant
Email ID and personal contact number (for each director)

For DIN registration

Make an application in e-form DIR-3 which is available on MCA’s Website.
Attach the subsequent documents alongside Form DIR-3:
Photo of the applicant/s
ID proof (attested)
Address proof (attested)
Make the prescribed payment for DIN in online mode.
Post payment a provisional DIN is generated.
Upon successful verification by MCA, the provisional DIN is approved to full-time DIN.

Documents for Incorporation of Company

Name of the corporate (uniqueness verified)
The capital structure of the corporate
List of shareholders of the company
The objective of the corporate
ID proofs of the directors
Passport
Driving license
Aadhar
Voter Id card
Residential address proof of director(s)
Bank statement
Telephone bill
Electricity bill
Mobile bill (not older than 2 months)
Consent of director(s) in (form DIR-2)
INC-9 (Affidavit)
Address proof of company’s registered office
Gas bill / Telephone bill / Electricity bill of the new office
If the office is on a lease, then the copy of the lease agreement and a NOC from the property owner
Declaration from DIN holders

Procedure for Company Name Approval

Getting a unique name for a Pvt. Ltd. firm could be a tedious task in itself. It is a time-consuming procedure and it takes considerable work hours to follow all RoC rules and determine whether the suggested name is already taken/registered or not. This process is generally made simpler by making use of a tool for checking the available company names. The database is updated regularly to ensure that the uniqueness of the name always exists. The database lists businesses that have an equivalent or similar name with their Company Identification Numbers (CINs) in its search results. The tool informs whether any specific name is unique or not and thus gives a brief head start within the name selection procedure.

Earlier, the INC29 allowed the submission of six names of preference for a new company. Following the amendments brought in May 2015, INC29 now admits only one name for an entity. But this has increased the danger of repeating names by manifolds. An applicant must understand all the principles before specifying a name for the company within the application or it could bring rejection. One ideal way to ensure the selection of the name is to turn up with a singular name followed by the company’s business type (descriptive type). It works within the following manner: within the recent Amendment of 2018, the now Private Ltd. can only apply for one name and there’s no resubmission process if the form is rejected Hence if the name is rejected again. An applicant must pay an additional fee during INC-1. The name of the proposed Pvt. Ltd. Company must be as per the norms of the Companies Act 2013 and should be up to date with the guidelines issued by MCA.

How to Choose a Unique Name?

Choosing a unique name for the company could be difficult for a company. For example, the web shopping portal ‘Snapdeal’ has registered itself as Jasper Infotech Private Limited. One may notice that the unique part of its name ‘Jasper’ is quite common, but it got registered anyway. The trick to make the name unique is to add the word ‘Infotech’ in its name. Similarly, there are many companies with the same name ‘Jasper’, but only one different word related to their field of work could make all the difference.

One cannot use Abbreviations, adjectives, or generic words for the unique component. So, options like ABC, or XYZ won’t work for a unique part. Similarly, names with generic quotes like ‘Good Quality Biscuits’ and ‘Excellent Chocolate’ won’t be registered. Unless approved by RBI or SEBI, words like ‘Bank,’ or ‘Exchange’ cannot be used. One can opt for trademark registration if they want to make their unique name a legal entity that no one else can copy.

The nature of the business should be the standard to pick the unique name component. For a firm like Wipro, one has got to choose Technology Services as the core work which will give nine options: Info-systems, Tech Solutions, Infotech, Tech, Technology Solutions, Computers, Innovations, Informatics or Processors.

If the chosen name clashes with the trademark of a well-known company, the RoC may raise objections in such cases. The applicant can use the proposed name if a ‘NOC’ is furnished by the owner of the Trademark. One must remember that the actual company name won’t matter as long as the company has a catchy trademark.

Characteristics of a Registered PLC

Minimum Members Required and Liability

As per the norms of the Companies Act, 2013 a PLC requires at least two members for incorporation. However, the maximum number can go up to 200. In a PLC, the financial liability of each member and shareholder is restricted to owned shares. It means that if the corporate goes into loss in any circumstances, the shareholders won’t face the risk of losing their personal assets. However, committing fraud related to the PLC would negate a shareholder’s indebtedness protection.

Continued Succession of Administration

One of the advantages of a Private Limited Company Registration is the perpetual succession of administrative control even when its owner dies or leaves the business suddenly. The corporation keeps existing within the eyes of the law until it’s legally dissolved or liquidated.

Number of Directors and Capital Requirements

As per norms of the Companies Act, 2013, a PLC must appoint at least two directors. No minimum paid-up capital is required to set up a PLC.

Separate Legal Entity Status

A PLC gets recognition as a separate legal entity with a continuous existence. The corporate can have its PAN number, bank accounts no., licenses, assets, liabilities, and approvals under its unique name.

Availability of Credit

A PLC can easily gather funds from debentures through its stockholders. A registered Pvt. Ltd. Company attracts funds from angel investors and venture capitalists, which allows the corporation to expand its business.

Prerequisites for PLC Registration

Before starting a Private Limited Company there are certain requirements that must be fulfilled. Given below is the list of requirements for registering a PLC in India:

The name of the proposed firm should be unique and should not resemble any other registered trademark or firm.
It must have at least two directors with two shareholders. The HIGHEST number of members could be up to 200. The maximum number of directors that a PLC can have is 15.
To incorporate a PLC, it is compulsory for all its directors to get a Digital Signature Certificate (DSC) to sign the e-forms digitally.

To Conclude..

Most of the businesses incorporated in India are registered as PLC or Private Limited Companies. The various benefits offered by this type of company makes it one of the most preferred ways of starting a business in India. If you’re willing to start out a business then even the most experienced financial experts will suggest registering as a PLC. The method of registration from MCA has been made simpler by introducing integrated and versatile forms with simplified guidelines. One can just contact a financial consultancy firm for assistance and let them take care of the registration procedure.

The post An Insight into Private Company Registration Process and Name Registration appeared first on MUDS.

How MUDS Management Helps in Registration of New Asset Financing Firms?

Shweta Gupta — Tue, 22 Sep 2020 03:31:53 +0000

How MUDS Management Helps in Registration of New Asset Financing Firms?

If you want to start a new Asset financing company, then not being familiar with all the legalities involving various legal and regulatory processes could prove to be a roadblock for your success. Many new players are trying to enter the Indian market by registering as Vehicle/Asset financing companies in India to utilize its ample resources and business potential. MUDS Management Consultancy Firm helps new businesses in registering as Asset Financing Companies or AFCs or other such Non-Banking Financial Companies (NBFCs) in India with the complete process.

Read on to know how to start a new Asset Financing Company in India and how MUDS can help you to make the complete process hassle-free.

How to Start Asset/Vehicle Finance Company

The Government of India is focussing on accelerating the development of the manufacturing sector under the “Make in India” initiative. To take advantage of this push by the government many new industrial start-ups are entering the Indian market. All these start-ups need financial assistance to buy industrial machinery and related products to set up their manufacturing units across the country.

This paves way for new asset finance companies to give loans to these manufacturers. Therefore, many new companies are looking to register themselves as NBFCs to establish their place in the market and take advantage of the current situations where the country is looking to boost the overall manufacturing sector. The market of automobiles production is also going through radical changes especially after the arrival of electric vehicles. Hence, vehicle financing is also picking up as the government is planning to revamp its public transport system. Replacement of conventional rickshaws with E-rickshaws is also part that plan and therefore, the demand for E-Rickshaw finance from NBFCs is increasing. All of this makes the prospect of setting up a new Asset finance company a profitable venture. So, if you are looking to set up a new asset financing company then you can contact MUDS Management Consulting Firm to get complete info and all the help to set up your company. Here is the overview of the steps to get started.

First, you must have the following set of documents ready for registration of your business:

ID Proof (Could be Aadhar Card, Voter ID Card, Passport or Driving License)
Copy of PAN Card
Passport Size Photos
Address Proof (Bank Statement, Telephone bill, Mobile Bill, and Electricity Bill)
Ownership Documents or Rent Agreement for office space
Electricity bill
No Objection Certificate from the owner for rented property
CIBIL records of all shareholder (more than 10% share in Company) and directors
Education & Experience proof of promoters
Fixed deposit of Rs. 2 Cr for the Purpose of NOF requirement
Net worth certificate of directors and shareholders

Now, let’s understand the procedure of starting a new Asset Finance Company in a step by step manner.

Register Your Asset Finance Company Under the Companies Act, 2013. MUDS Management’s legal team helps companies in the registration process with Reserve Bank of India by streamlining the process of collecting all necessary documents and ensuring strict adherence to the policy followed for registration. The Asset Finance Company can be registered as a private or public company depending upon the choice of its founders.
Raise Authorized Paid-up Capital of Up to Two Crores: The company has to raise an authorized and paid-up capital of about 2 crores to meet the required standards of registration.
Depositing the Sum in Bank and Getting Certificate: After raising this sum the company is required to open a fixed deposit account in a bank and deposit this money. After this, they must obtain a Certificate of no lien from the bank to move forward with the process of registration.
Getting All the Certified Copies to Complete the Checklist of RBI Registration: The company should compile the following set of documents along with the documents mentioned above to complete the checklist required for registration.

Certified Copy of Certificate of Registration
A copy of Fixed Deposit receipt and bankers’ certificate of lien indicating balances in support of Net Owned Funds.
Bankers Report for Applicant Company/ group companies
Certified copy of an extract of the main object clause in the MOA (Memorandum of Association) relating to the financial business.
Certified Copy of the Board resolution

Fill Online Application: Once you have all the documents ready for registration, fill the online application form for NBFC registration as an ASSET FINANCE COMPANY (AFC). After filling the form, the company will get an auto generated Company Application Reference Number or CARN.
Submit the Hard Copy of Application to RBI’s Regional Office: After filling the online application form and getting the CARN for your company, the hard copies of all the necessary and supporting documents must be compiled with the application form. Now, all these documents with the application form should be submitted to the regional RBI Office to complete the process of registration.

How Muds Management Assist in Registration?

Now, we understand that running a Vehicle/Asset financing firm in India requires registration with the Reserve bank of India. The process for the same is outlined in the above sections. However, this process proves to be cumbersome and time taking for founders of NBFCs, and therefore, taking assistance from MUDS management can help to save time and the hassle of the registration process.

Being one of the best management consulting service providers, MUDS management has worked with top NBFCs in India over the years of its operation. With the experience of assisting many clients in legal and regulatory services across different domains, you can rely on MUDS Management to get the best services for your business. You can reach out to MUDS Management Consulting for assistance on new NBFCs registration by contacting them on +91 9599653306 or by email on info@muds.co.in.

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