Corporate Identification Number: How to Get It?

A Corporate Identification Number (CIN) is a unique number of 21 characters. It serves as a distinctive identifier for companies and is essential for various legal and administrative purposes. The CIN is issued during the company's incorporation process and is used in all official communications and filings with the MCA. In this article, you will learn the importance and features of the Corporate Identification Number (CIN).

What is a Corporate Identification Number?

A Corporate Identification Number or CIN number is a unique 21-character alphanumeric code assigned to companies registered in India by the Registrar of Companies under the Ministry of Corporate Affairs. This code serves as a company's identity, encapsulating key details such as its listing status, industry classification, state of registration, year of incorporation, company type, and a unique registration number. The CIN is crucial for legal compliance and is required to be mentioned on various official documents, which include invoices, letterheads, and filings with the MCA. It facilitates the tracking and verification of a company's information by regulatory authorities and stakeholders.

Who Receives a CIN?

The following entities are eligible to receive a Corporate Identification Number upon registration in India:

• Private Limited Companies.
• One Person Companies.
• Public Limited Companies.
• Companies owned by the Government of India.
• State Government Companies.
• Section 8 Companies.
• Nidhi Companies.

It is important to note that Limited Liability Partnership do not receive a CIN. Instead, they are assigned a Limited Liability Partnership Identification Number or LLPIN, which is a unique 7-digit identification code for LLPs.

Components of a CIN

A Corporate Identification Number serves as a comprehensive identifier for businesses. The CIN is structured into six distinct sections, each providing specific information about the company.

1. Stock Market Listing Status

The first character of a company's CIN indicates its listing status on the Indian stock market. If the company is listed, the CIN begins with the letter 'L', and if it is unlisted, it starts with 'U'.

This designation helps stakeholders quickly identify whether a company is publicly traded or privately held. The listing status is a crucial component of the CIN. This provides immediate insight into the company's market presence.

2. Industry Code

The next five characters represent the industry code, based on the National Industrial Classification system. This code classifies the company's primary business activity. The various NIC Codes are mentioned below in the chart:

3. State Code

In a company's Corporate Identification Number, the seventh and eighth characters represent the state or union territory where the company's registered office is located. Each state and union territory in India is assigned a unique two-letter code by the Registrar of Companies.

For example, 'KA' denotes Karnataka, 'MH' stands for Maharashtra, and 'TN' represents Tamil Nadu. These codes are integral to the CIN, as they help identify the jurisdiction under which the company is registered.

4. Year of Incorporation

Characters nine to twelve represent the year the company was incorporated. For instance, 2010 indicates the company was incorporated in the year 2010.

5. Company Type or Ownership

The characters from thirteen to fifteen specify the company's legal structure or ownership type:

1. PTC for Private Limited Company.
2. PLC for Public Limited Company.
3. GOI for Government of India.
4. SGC for State Government Company.
5. FLC for Financial Lease Company.
6. GAP for General Association Public.
7. GAT for General Association Private.
8. NPL for Not For Profit License Company.
9. ULL for Public Limited Company.
10. ULT for Private Limited Company.
11. FTC for Subsidiary of a Foreign Company.

6. Company Registration Number

The final six characters are a unique registration number assigned to the company by the Registrar of Companies.

7. Example of a CIN: L12345MH2010PTC123456

In this example CIN number, the L denotes the company’s stock listing status. The next digits 12345 represent the Industry code. The next letters, MH, signify the state in which the company is registered. The four digits 2010 indicate the year of incorporation. The PTC represents the type of company, PTC, which stands for Private Limited Company. The last six digits are the unique registration number assigned to the company by the RoC.

Importance of CIN

The Corporate Identification Number serves as a crucial identifier and plays a significant role in various aspects of a company's operations. Here is why the CIN is important:

8. Legal Compliance

Every registered company in India is legally required to have a CIN. This number must be mentioned on all official documents, which include invoices, receipts, letterheads, and annual reports. Failure to comply with this requirement can lead to penalties.

9. Business Identification

The CIN acts as a unique identifier for a company. It distinguishes it from other entities. It provides essential information about the company's registration, such as the industry code, state of registration, year of incorporation, and type of company.

10. Access to Credit

Financial institutions often require a company's CIN when processing loan applications. The presence of a CIN assures lenders of the company's legal standing and facilitates the credit evaluation process.

11. Tax Compliance

The CIN is essential for fulfilling various tax obligations. It includes filing returns for Goods and Services Tax, income tax, and Tax Deducted at Source. It helps in tracking the company's tax-related activities and ensures adherence to tax regulations.

12. Corporate Governance

Displaying the CIN on official documents promotes transparency and accountability in business operations. It allows stakeholders, including investors and regulatory bodies, to verify the company's legitimacy and track its compliance with corporate laws.

Documents Where CIN Must Be Mentioned

According to the Companies Act, 2013, every registered company in India must mention its Corporate Identification Number on several important documents. This helps to ensure transparency and legal compliance. Here is a clear breakdown of where the CIN must be displayed:

• Invoices and Receipts

Every invoice or receipt issued by a company must include its CIN. This shows that the business is legally registered and helps in official verification.

• Letterheads and Notices

Any formal communication like letters, notices, or official correspondence should clearly mention the CIN. It adds authenticity and confirms the company’s legal identity.

• Annual Reports and Audit Reports

The CIN must appear on annual financial reports and audit reports. This ensures that the reports are linked to the correct registered company.

• E-Forms Submitted to the MCA Portal

All electronic forms submitted on the Ministry of Corporate Affairs portal must have the company’s CIN. This helps the government track and process company filings properly.

• Official Publications and Communications

Brochures, advertisements, press releases, and any other official publications should carry the CIN. It builds trust with the public and confirms the information is from a registered business.

How to Obtain a Corporate Identification Number in India?

It is a crucial step to register a company in India to obtain a Corporate Identification Number. Here is a straightforward guide to acquire your CIN:

1. Choose a Unique Company Name

Select a distinctive name for your company that complies with the naming guidelines provided by the MCA. Ensure the name is not identical or similar to existing company names or trademarks.

2. Decide on the Company Type

Determine the structure of your company, such as Private Limited, Public Limited, One Person Company, or Limited Liability Partnership, based on your business needs.

3. Obtain Digital Signature Certificates for Directors

Acquire DSCs for all proposed directors. DSCs are essential for signing electronic documents submitted to the MCA portal.

4. Apply for Director Identification Numbers for Directors

Each director must have a DIN. You can apply for DINs through the SPICe+ form during the incorporation process.

5. Reserve the Company Name through the MCA Portal

Use the 'RUN' or Reserve Unique Name service on the MCA portal to apply for name reservation. Approval is subject to availability and compliance with naming norms.

6. Draft the Memorandum and Articles of Association

Prepare the MOA and AOA, which outline the company's objectives, rules, and regulations. These documents are mandatory for incorporation.

7. Submit the Incorporation Application Using the SPICe+ Form

Complete and submit the SPICe+ or Simplified Proforma for Incorporating Company Electronically Plus form on the MCA portal. This integrated form covers multiple services. This includes DIN allotment, name reservation, PAN, TAN, and GSTIN applications.

8. Receive the Certificate of Incorporation Containing the CIN

Upon successful verification and approval by the ROC, you will receive the Certificate of Incorporation via email. This certificate includes your company's CIN, officially recognizing your company as a legal entity.

Penalties for Not Mentioning CIN in Mandatory Documents

Under Section 12(3)(c) of the Companies Act, 2013, every registered company in India is legally required to display its CIN on various official documents. This includes business letters, invoices, notices, and other official publications. Failure to comply with this requirement can lead to significant penalties.

• Penalty Structure

A penalty of Rs.1,000 is imposed for each day the default continues. The total penalty is capped at Rs.1,00,000 for each default. These penalties apply to both the company and every officer who is in default. This means that each responsible individual can be fined separately.

• Illustrative Case

In a recent adjudication, the Ministry of Corporate Affairs imposed a cumulative penalty of Rs.6,000 on a private limited company and its two directors for failing to mention the CIN on an official publication. The company admitted to the violation, which lasted for just one day, yet still faced penal action.

• Importance of Compliance

Ensuring that the CIN is correctly mentioned on all mandatory documents is crucial for legal compliance and maintaining the company's credibility. Non-compliance not only attracts financial penalties but can also lead to reputational damage and increased scrutiny from regulatory authorities.

• Recommendation

Companies should regularly review their official documents and communication materials to ensure that the CIN is prominently displayed as required. Implementing internal checks and training for staff involved in document preparation can help prevent such oversights.

Changing Your Corporate Identification Number

A company's Corporate Identification Number is a unique identifier assigned during incorporation. While it generally remains constant, certain changes in the company's status or structure necessitate an update to the CIN. These changes are automatically reflected upon filing the appropriate documents with the Ministry of Corporate Affairs.

Circumstances Leading to a Change in CIN

• Change in Listing Status

If a company transitions from being unlisted to listed on the stock exchange, or vice versa, the first character of its CIN changes from 'U' to 'L', or if the company transitions from listed to unlisted on the stock exchange, the CIN will become ‘L’ to ‘U’.

• Relocation of Registered Office to a Different State

Moving the company's registered office to another state alters the state code segment of the CIN to reflect the new location.

• Change in Primary Business Activity or Industry

If a company shifts its main business operations to a different industry sector, the industry code within the CIN is updated to represent the new classification.

These updates ensure that the CIN accurately represents the company's current legal and operational status.

It is important to note that companies cannot manually request a change to their CIN, it is updated automatically when the relevant changes are officially recorded through filings with the MCA.

Conclusion

Understanding the Corporate Identification Number is crucial for any business operating in India, as it serves as a unique identifier and ensures legal compliance. Whether you are starting a new venture or managing an existing one, having the right licenses and registrations is essential.

At Online Legal India, we specialize in simplifying the process of obtaining necessary business registrations and licenses. We provide expert support in company registration. With a team of experienced professionals, we ensure that your business complies with all legal requirements, allowing you to focus on growth and operations.