Secretarial Audit: Applicability, Scope, and Process

Jun 9, 2025
Private Limited Company vs. Limited Liability Partnerships

India’s corporate ecosystem is governed by an evolving web of laws and compliance requirements. For businesses, especially large or listed ones, staying on top of legal obligations is important to avoid penalties and foster trust and transparency with stakeholders.

One powerful tool for ensuring this is the Secretarial Audit, a mandatory compliance check for certain companies under Indian law. It acts as an early warning system to detect non-compliance and governance gaps that can otherwise harm the business.

In this blog, we’ll explain a Secretarial Audit, its applicability, scope, and process, along with key benefits and penalties for non-compliance.

Table of Contents

What is Secretarial Audit?

A Secretarial Audit is an independent verification of a company’s compliance with corporate laws, rules, and regulations.

It helps companies to:

  • Detect instances of non-compliance early.
  • Promote good governance and transparency.
  • Ensure that legal and procedural requirements are consistently met.

The audit is conducted by an independent professional, usually a Company Secretary (CS) holding a valid Certificate of Practice issued by the Institute of Company Secretaries of India (ICSI).

Secretarial Audit Applicability

Under the Companies Act, 2013, certain classes of companies are required to undergo a Secretarial Audit.

It is mandatory for:

  • All Listed Companies.
  • All Public Companies with:
    • Paid-up Share Capital of ₹50 crore or more, or
    • Turnover of ₹250 crore or more.
  • All types of companies (including Private Companies) having outstanding borrowings of ₹100 crore or more from banks or financial institutions.

Secretarial Audit Report

The Secretarial Audit Report is the formal output of the audit process. It:

  • Certifies whether the company is in compliance with applicable laws.
  • Identifies any governance risks or gaps.
  • Highlights areas of non-compliance and recommends corrective actions.

The report is prepared in Form MR-3, submitted to the Board of Directors, and included in the company’s Annual Report. As per Section 204 of the Companies Act, 2013, the audit can only be conducted and the report issued by a:

  • Practising Company Secretary (PCS).
  • Holding a valid Certificate of Practice from ICSI.

Scope of Secretarial Audit

The scope of a Secretarial Audit is broad and spans multiple laws, including but not limited to:

  • Companies Act, 2013
  • Securities Laws, including:
    • SEBI (LODR) Regulations
    • SEBI Takeover Code
    • SEBI Insider Trading Regulations
    • SEBI Listing Agreement
  • Foreign Exchange Management Act (FEMA)
  • Labour Laws
  • Environmental Laws
  • Industry-specific Regulations
  • Secretarial Standards issued by ICSI

Additionally, the Secretarial Auditor also:

  • Reviews the company’s systems and processes for compliance.
  • Examines the Board structure and its functioning.
  • May rely on reports from other professionals (auditors, legal counsel) for certain compliance areas.

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Eligibility Criteria for the Appointment of a Secretarial Auditor

To be appointed as a Secretarial Auditor, the individual must:

  • Be a qualified Company Secretary (CS) and a member of ICSI.
  • Hold a valid Certificate of Practice (CoP) issued by ICSI.
  • Have undergone relevant training in corporate governance and compliance.
  • Maintain professional ethics and conduct in line with ICSI guidelines.

Only a Practising Company Secretary (PCS) is authorised to conduct and issue a Secretarial Audit Report.

Process of Secretarial Audit

The typical step-by-step process for conducting a Secretarial Audit is:

  1. Preparation of a Compliance Checklist:
    Based on applicable laws and regulatory frameworks.

  2. Compliance Verification:
    The auditor examines the company’s records, registers, filings, and processes.

  3. Management Interaction:
    Discusses preliminary findings and areas of concern with management.

  4. Recommendations and Corrective Actions:
    Advises management on how to address any gaps or non-compliance issues.

  5. Preparation of the Final Report (MR-3):
    The auditor formally documents observations and recommendations.

  6. Filing and Disclosure:
    The report is submitted to the Board and included in the Annual Report as required.

Features of Company Secretarial Audit

A Secretarial Audit is distinguished by several key features:

  • Independent Audit:
    Conducted by an external Practising Company Secretary.

  • Comprehensive Scope:
    Covers company law, securities law, tax law, labour law, environmental law, and other applicable legal frameworks.

  • Systematic & Evidence-Based:
    Based on a thorough review of records and procedures.

  • Board-Level Reporting:
    Findings and recommendations are directly reported to the Board of Directors.

  • Governance-Focused:
    Designed to strengthen the company’s corporate governance practices.

Punishment for Default Secretarial Audit

Non-compliance with Secretarial Audit provisions carries penalties under:

Section 204(4) of the Companies Act, 2013:

The company, every officer in default, and the PCS (if found guilty) are liable to a fine of up to ₹5 lakh.

Section 448 (False Statements):

  • Imprisonment up to 10 years, and/or
  • Fine up to ₹10 lakh for making false statements in the audit report.

The Company Secretaries Act, 1980:

Disciplinary action against the Company Secretary may include:

  • Suspension or cancellation of the Certificate of Practice.
  • Monetary penalties.
  • Professional misconduct proceedings.

Objectives of Secretarial Audit

The key objectives of Secretarial Audit are:

  • Ensure the company complies with legal and regulatory frameworks.
  • Identify non-compliance issues before they become liabilities.
  • Promote good corporate governance.
  • Protect the interests of stakeholders- investors, employees, customers, and regulators.
  • Help management take corrective actions proactively.
  • Prevent penalties and legal actions for non-compliance.

Benefits of Secretarial Audit

Conducting a Secretarial Audit offers many advantages:

  • Enhances the company’s compliance culture.
  • Reduces legal risks and the likelihood of penalties.
  • Supports better corporate governance and transparency.
  • Increases stakeholder confidence- important for investors and regulators.
  • Helps Directors and Management make more informed decisions.
  • Facilitates continuous improvement in internal processes and systems.

Frequently Asked Questions

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Frequently Asked Questions

What is the applicability of Secretarial Audit to companies?

Secretarial Audit is mandatory under Section 204 of the Companies Act, 2013 for the following companies:

  • All Listed Companies
  • Public Companies with:
    • Paid-up share capital of ₹50 crore or more, or
    • Turnover of ₹250 crore or more

  • Private Companies with outstanding borrowings of ₹100 crore or more from banks or financial institutions.

Is Secretarial Audit mandatory for SME-listed companies?

Yes, Secretarial Audit is mandatory for all listed companies, including SME listed companies, irrespective of their size, as per the Companies Act, 2013.

Is a Statutory Audit compulsory for small companies?

Yes, a Statutory Audit is mandatory for all companies, including small companies, under Section 139 of the Companies Act, 2013. Regardless of size or turnover, every company must appoint a statutory auditor to audit its financial statements annually.

What is the limit of a Secretarial Audit?

There is no specific financial limit for conducting a Secretarial Audit. Applicability is based on:

  • Listing status (mandatory for all listed companies), or
  • Financial thresholds for Public and Private companies as mentioned earlier.

However, as per ICSI guidelines, a Practising Company Secretary (PCS) can conduct Secretarial Audits for a maximum of 10 companies per financial year.

Who can conduct the Secretarial Audit?

Only a Practising Company Secretary (PCS) holding a valid Certificate of Practice (CoP) issued by the Institute of Company Secretaries of India (ICSI) can conduct a Secretarial Audit.

Who can sign the Secretarial Audit Report?

The Secretarial Audit Report (in Form MR-3) can only be signed and issued by a Practising Company Secretary (PCS) who has conducted the audit.

How is the Secretarial Auditor appointed?

The Secretarial Auditor is appointed by the company’s Board of Directors through a formal Board Resolution. The appointment should ideally be done at the start of the financial year to ensure adequate audit scope coverage.

Related Posts

How to apply for a Director Identification Number (DIN) in India

How to apply for a Director Identification Number (DIN) in India

The Director Identification Number (DIN) is a unique identification number assigned to an individual who is appointed as a director of a company in India. It is issued by the Ministry of Corporate Affairs (MCA) under the provisions of the Companies Act 2013.

The DIN is mandatory for all existing and aspiring directors, and it serves as a way to track the activities and roles of directors across different companies to prevent fraud and ensure transparency.

In the blog, we'll explore the intricacies of the Director Identification Number (DIN) system in India and its crucial role in corporate governance.

Table of Contents

Importance of a Director Identification Number (DIN)

Importance of a Director Identification Number & its application process

The Director Identification Number (DIN) is of significant importance in India's corporate governance framework. Here are some key reasons why DIN is crucial:

•  Unique Identification

  • DIN provides a unique identification number to each director, ensuring there is clarity among individuals holding directorial positions in various companies.

•  Transparency and Accountability

  • DIN enhances transparency by making director-related information publicly available.
    Stakeholders, including shareholders, regulators, and investors, can access the DIN database to verify the credentials and track the activities of directors across different companies.

•  Regulatory Compliance

  • Obtaining a DIN is a mandatory requirement for individuals aspiring to become directors of Indian companies. The DIN system in India was implemented through Sections 266A to 266G of the Companies (Amendment) Act, 2006.

•  Ease of Business Operations

  • DIN streamlines administrative processes related to director appointments and changes.
    By having a standardized identification system for directors, companies can efficiently manage their board compositions, update regulatory filings, and ensure compliance with legal requirements.

•  Investor Confidence

  • The existence of a robust director identification system like DIN instills confidence among investors, both domestic and international.

Format of a Director Identification Number

The DIN is an 8-digit identifier issued by the Ministry of Corporate Affairs (MCA), the regulatory authority overseeing corporate affairs in India.

Each DIN is unique to the individual director and remains valid for their lifetime unless surrendered or revoked by the MCA due to non-compliance or other regulatory reasons.

Example of a DIN: 002345678

Documents required for obtaining a Director Identification Number

For SPICe+:

  • Proof of Identity
  • Proof of Address
  • NOC or Rental Agreement

For DIR 3:

  • Proof of Identity
  • Proof of Residence
  • NOC or Rental Agreement
  • Digital Signature Certificate (DSC)
    Note: The identity proof and Address proof must be attested by the Company Secretary, a CA or, any professional. ,

How to apply for a Director Identification Number?

Obtaining a Director Identification Number (DIN) is mandatory before being appointed as a director of an existing company in India.

While the DIN for directors of a new company is allotted during the company's incorporation through an integrated SPICe+ Form, if you’re seeking directorship in existing companies or LLPs, you must apply for a DIN separately. The application process, known as DIR-3, can be completed online through the official website of the Indian Ministry of Corporate Affairs (MCA).

Application for DIN Through SPICE+

If you don’t have a Director Identification Number (DIN) and intend to serve as the first director in a new company, you must submit an application using the eForm SPICe+.

  • Obtain the Digital Signature Certificates (DSCs) for the proposed Directors,
  • Log in to the MCA portal with valid credentials.
  • Navigate to the 'SPICe+' application from the application history on the user dashboard.
  • Submit the SPICe+ Part A application.
  • Click on the 'Proceed for incorporation' button.
  • Access the SRN dashboard by clicking on the relevant SRN/SPICe+ application with the status as 'Draft.'
  • Click on "Form No. SPICe + Part B”.
  • Complete and Submit the SPICe+ Part B application along with the linked forms.
  • Upload the DSC-affixed PDF document(s).
  • Pay the fees.
  • An intimation mail, along with the Certificate of Incorporation, PAN, TAN, etc., will be generated upon processing the web form.
  • If the forms are uploaded successfully and the payment is made, the Approved DIN will be generated if there are no indications of potential duplication. However, if the details are flagged as potentially duplicate, a Provisional DIN will be generated instead.

Note: A provisional DIN will remain valid for a period of 60 days from the date on which it was generated.

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Application for DIN Through DIR 3

If you intend to become a Director in an existing company, you must submit an application using eForm DIR-3 and adhere to the process outlined below.

  • Visit the official MCA website.
  • Register as a new user if you haven't already done so, or log in using valid credentials.
  • Select the "e-Forms" tab and click on the "e-Form upload" link to access the e-Form DIR-3.
  • Complete the DIR-3 form with accurate details.
  • Scan and upload the necessary supporting documents (attested) as per the requirements specified in the DIR-3 form.
  • Form DIR-3 must be signed by you and digitally verified by a Company Secretary employed full-time by the company or by the Managing Director, Director, CEO, or CFO of the existing company where you intend to be appointed as a director.
  • Pay the prescribed fee for processing.
  • Once the verification process is completed and the application is found to be in order, you will be allotted a DIN.
  • However, if the details are flagged as potentially duplicate, a Provisional DIN will be generated by the MCA.

As a director, you must notify all companies where you hold a directorship about the DIN within one month of receiving it from the central government. Subsequently, the company must inform the Registrar of Companies (RoC) within 15 days from the date when the director notifies them of their DIN. Failure to do so can incur penalties.

Common Causes of Rejection of a DIN

Here are some common mistakes that lead to the rejection of the DIN application:

  • Failure to submit supporting documents
  • Submission of invalid application or supporting documents
  • Lack of attestation on documents
  • Absence of a valid Digital Signature Certificate (DSC) for DIR3 applications

Validity of the Director Identification Number

In India, the Director Identification Number (DIN) remains valid for the lifetime of the individual director unless surrendered or revoked by the Ministry of Corporate Affairs (MCA) due to non-compliance, disqualification, or other regulatory reasons.

Fees for the Director Identification Number in India

If you are applying for a DIN through SPICe+, there are no additional charges as it is included in the fees of the SPICe+ application.

However, if you are applying through DIR-3, a fee of Rs 500 will be associated with it.

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  • Freelancers, Small-scale businesses
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  • Service-based businesses
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One Person Company
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Private Limited Company
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  • Service-based businesses
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Limited Liability Partnership
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BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

Is there any difference between a Director Identification Number(DIN) and a Designated Partner Identification Number (DPIN)?

DIN is for individuals holding or intending to hold directorial positions in companies under the Companies Act, while DPIN is for designated partners in Limited Liability Partnerships (LLPs) under the Limited Liability Partnership Act. However, in terms of functionality, both serve the same purpose.

Can I use my DIN for multiple companies?

Yes, a single DIN can be used to hold directorship positions in multiple companies. However, each company must separately intimate the Registrar of Companies (RoC) about the director's DIN.

Can I hold multiple DINs?

No, you can hold only one DIN at any point in time. It is illegal to possess multiple DINs, and individuals found to have more than one may face penalties and other legal consequences.

How can I change the details provided for my DIN in the future?

In case of any modifications to the particulars provided in form DIR-3/SPICe concerning directors, you can submit e-form DIR-6. For example, if there is an address change, you must notify this change by submitting an e-form DIR-6 along with the necessary attested document.

What happens if my DIN application is rejected?

If your DIN application is rejected, you will receive a communication from the MCA specifying the reasons for rejection. You may have the option to rectify the errors and reapply.

Can I transfer my DIN to someone else?

No, a DIN is non-transferable and is associated only with the individual director to whom it is assigned.

Promoters of a Company: Meaning, Roles, and Legal Responsibilities

Promoters of a Company: Meaning, Roles, and Legal Responsibilities

Behind every successful company lies the vision and initiative of its promoters—the individuals or entities responsible for bringing the business into existence. Promoters play a pivotal role in the early stages of a company's lifecycle, from conceptualising the business idea to ensuring its legal incorporation and securing initial funding.

Their responsibilities extend beyond just setting up the business; they lay the foundation for the company’s structure, compliance, and future growth. However, with great influence comes great responsibility, as promoters are entrusted with legal and ethical obligations to act in the best interests of the company and its stakeholders.

This blog dives into the meaning, types, roles, duties, and liabilities of company promoters, offering insights into their critical role in shaping successful businesses.

Table of Contents

Definition of Company Promoter

A company promoter is a person or entity that undertakes the responsibility of forming a company. As per legal definitions, a promoter is someone who conceives the idea of the business, takes the necessary steps to incorporate the company, and facilitates its registration.

For instance, if an individual drafts the Memorandum of Association (MOA) and Articles of Association (AOA) for a business and secures initial funding, they qualify as a promoter. Promoters can be:

  • Individuals (e.g., founders of a startup)
  • Groups of people (e.g., a partnership forming a company)
  • Organisations (e.g., a holding company promoting a subsidiary)

Who Are the Promoters of a Company?

Promoters can be anyone involved in the process of establishing a company. This includes:

  1. Founders – Entrepreneurs or individuals initiating the business idea.
  2. Investors – Entities that fund the company’s formation and help in structuring.
  3. Professional Firms – Companies that specialise in managing incorporation and initial stages.

It is important to differentiate between named promoters, whose roles are mentioned in legal documents like the prospectus, and unofficial contributors, who may assist without formal recognition.

Types of Promoters of a Company

Promoters can be classified based on their involvement and expertise:

1. Professional Promoters

These are specialists with expertise in company formation. For example, consulting firms or legal advisors assisting in setting up a company.

2. Occasional Promoters

Individuals who promote companies sporadically, typically when they spot a business opportunity, such as a seasoned entrepreneur launching a startup.

3. Financial Promoters

Entities like venture capitalists or investment firms promote businesses by providing initial funding.

4. Entrepreneurial Promoters

Business owners or founders who initiate the company based on their vision and strategy. An example is a tech founder creating a software startup.

Functions of a Promoter

The role of a promoter is multifaceted. Their primary functions include:

  1. Identifying a Business Opportunity
    Promoters analyse market trends, identify viable opportunities, and decide on the scope of the business.
  2. Preparing Necessary Documentation
    Drafting the MOA, AOA, and other legal documents essential for company registration.
  3. Securing Capital and Initial Funding
    Approaching investors or institutions to raise funds for the company.
  4. Registering the Company
    Ensuring the company’s incorporation by meeting all legal requirements, such as filing with the Registrar of Companies (RoC).
  5. Establishing Operations
    Setting up offices, hiring the initial workforce, and laying out the operational roadmap.

Duties of a Company Promoter

Promoters have critical duties to uphold the integrity and governance of a company. These include:

  1. Acting in Good Faith
    They must prioritise the company’s interests over personal gain.
  2. Avoiding Conflicts of Interest
    Promoters are obligated to disclose any potential conflicts that may affect the company.
  3. Disclosure of Personal Interests
    Any benefits or transactions involving the promoter must be transparently disclosed.
  4. Providing Accurate Information
    Misrepresentation of facts during the company’s formation can lead to legal consequences.

Rights of a Promoter

Despite their duties, promoters are entitled to certain rights:

  1. Right to Indemnity
    They can claim indemnity for liabilities incurred during company formation.
  2. Right to Recover Preliminary Expenses
    Expenses made for incorporation can be reimbursed.
  3. Right to Remuneration
    Promoters can receive remuneration for their services, either as cash or shares.

Liability of a Promoter

Promoters may face liabilities in specific scenarios:

  • Civil Liability: Misrepresentation or breach of duties can result in compensation claims.
  • Criminal Liability: Fraud or deliberate misconduct can lead to prosecution.
  • Public Examination: Promoters may be publicly examined in cases of company insolvency.
  • Personal Liability: They can be personally held liable for contracts signed before incorporation if the company does not ratify them.

Difference Between Promoters and Directors

Parameters Promoters Directors
Role Initiates the idea and formation of the company. Manages and oversees the operations of the company post-incorporation.
Involvement Active during the pre-incorporation phase. Active throughout the life of the company.
Legal Appointment Not formally appointed; their role is based on their contribution to forming the company. Formally appointed by shareholders or the board of directors.
Legal Status Not considered an officer of the company. Considered an officer under company law with defined duties.
Remuneration Paid for services during company formation, often through shares or cash. Paid via salaries, commissions, or benefits as determined by the company.
Ownership of Shares May or may not hold shares in the company. Often hold shares as part of their involvement in the company, but not mandatory.
Examples Founders, early-stage investors, or consultants initiating the company. Board members or executives appointed to run the company.

Related Read - Who is a Director of a Private Limited Company?

Real-Life Examples of Famous Company Promoters

1. Dhirubhai Ambani (Reliance Industries)

Dhirubhai Ambani, the visionary founder of Reliance Industries, started the company in 1966 as a small polyester trading firm. Through his entrepreneurial spirit, he transformed it into a global conglomerate spanning petrochemicals, textiles, and telecommunications, making Reliance a household name in India.

2. Narayana Murthy (Infosys)

Narayana Murthy, the co-founder of Infosys, played a pivotal role in establishing one of India’s most successful IT companies in 1981. His commitment to transparency, innovation, and customer-centricity positioned Infosys as a global leader in software services and outsourcing.

3. Elon Musk (Tesla, SpaceX)

Elon Musk is a modern-day promoter known for revolutionising industries through Tesla and SpaceX. By promoting electric vehicles and renewable energy with Tesla and pioneering space exploration with SpaceX, Musk has demonstrated how visionary leadership can disrupt traditional industries and redefine the future.

Frequently Asked Questions

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Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What are the promoters of a company?

Promoters are individuals, groups, or entities that take the initiative to establish a company. They are responsible for conceiving the business idea, arranging initial funding, completing legal formalities, and ensuring the company is incorporated. 

Can a promoter of a company be the independent director?

No, a promoter cannot serve as an independent director of the same company. According to Section 149(6) of the Companies Act of 2013, independent directors must not have any material or relationship with the company, its promoters, or its directors. 

How to become a promoter of a company?

To become a promoter of a company, you need to:

  1. Conceive a Business Idea: Identify a viable business concept or opportunity.
  2. Conduct Feasibility Studies: Evaluate the market potential, resources, and legal requirements.
  3. Prepare the Incorporation Process: Draft documents such as the Memorandum of Association (MOA) and Articles of Association (AOA).
  4. Arrange Capital: Secure the initial funds needed to start the business, either through personal investment, partnerships, or external sources.
  5. Register the Company: File for incorporation with the Registrar of Companies (ROC) as per the applicable laws in your jurisdiction.

How to find promoters of a company?

To identify the promoters of a company, you can:

  1. Check Company Filings: Promoters are often named in the incorporation documents, such as the MOA, AOA, or prospectus.
  2. Review Annual Reports: Public companies disclose promoter details in their annual reports under the shareholding pattern section.
  3. Visit MCA (Ministry of Corporate Affairs): In India, you can access promoter details on the MCA website by searching the company’s filings.
  4. Examine Stock Exchange Filings: For listed companies, stock exchanges (like NSE and BSE) provide shareholding data that identifies promoters.

What is the legal position of a promoter?

The legal position of a promoter is that of a fiduciary agent for the company. While they are not employees or directors, promoters owe a duty of good faith and fairness to the company. Their legal responsibilities include:

  • Acting in Good Faith: Avoiding conflicts of interest and prioritising the company’s interests.
  • Disclosing Personal Interests: Declaring any personal benefits or profits made during the promotion process.
  • Liability for Misrepresentation: Promoters can be held liable for false statements in the prospectus or incorporation documents.
  • Compliance with the Law: Ensuring all legal formalities are followed during company formation.

What is the difference between the promoter and the founder of the company?

Parameters Promoter Founder
Definition Individual or entity responsible for establishing the company. Person who starts the business idea.
Role Focuses on legal incorporation and securing capital. Often plays a visionary role in the business journey.
Involvement May step away after incorporation. Usually continues to manage and grow the company.
Legal Status Named in company incorporation documents as per law. Not necessarily defined legally.
Example Early-stage investors or professionals. Entrepreneurs or business visionaries.

In many cases, a founder can also act as a promoter, but not all promoters are founders.

Mukesh Goyal

Mukesh Goyal is a startup enthusiast and problem-solver, currently leading the Rize Company Registration Charter at Razorpay, where he’s helping simplify the way early-stage founders start and scale their businesses. With a deep understanding of the regulatory and operational hurdles that startups face, Mukesh is at the forefront of building founder-first experiences within India’s growing startup ecosystem.

An alumnus of FMS Delhi, Mukesh cracked CAT 2016 with a perfect 100 percentile- a milestone that opened new doors and laid the foundation for a career rooted in impact, scale, and community.

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Corporate Identification Number (CIN) Explained: Importance, Usage and More

Corporate Identification Number (CIN) Explained: Importance, Usage and More

A Corporate Identification Number (CIN) is a unique identifier issued to companies registered with India's Registrar of Companies (ROC). This number is provided at the time of registration and plays a vital role in company compliance. It must be included in all official filings, audits, and reports submitted to the Ministry of Corporate Affairs (MCA). 

To ensure smooth business operations, you must include your CIN in all required documents. It’s mandatory and demonstrates your company’s legal standing.

Table of Contents

What Is a Corporate Identification Number (CIN)?

A Corporate Identification Number or CIN number is a 21-character alpha-numeric code assigned to companies registered under the Registrar of Companies in India. It acts as a unique identifier, reflecting details like the type of company, its state of registration, and year of incorporation.

A CIN is provided to all companies registered in India, including:

  • Private Limited Companies (PLCs)
  • One Person Companies (OPCs)
  • Companies owned by the Government of India
  • State Government Companies
  • Not-for-Profit Section 8 Companies
  • Nidhi Companies, etc.

In contrast, Limited Liability Partnerships (LLPs) are assigned an LLPIN (Limited Liability Partnership Identification Number). The CIN plays a vital role in company identification and compliance with legal obligations.

Importance of Corporate Identification Number

The CIN is critical for identifying and tracking a company’s activities from its incorporation. Assigned by the Registrar of Companies, it ensures every registered company has a distinct identity under the Ministry of Corporate Affairs. This 21-character alpha-numeric code provides key details, such as the company’s registration type, state, and year of incorporation.

For example, a typical CIN might look like U12345MH2024PLC567890, where each segment represents specific company details.

The CIN must be included in all filings, audits, and reports submitted to the ROC or MCA. It is essential for verifying company information during legal and financial transactions, offering transparency and credibility. The CIN acts as the foundation for company identification, ensuring compliance with Indian business regulations.

Breaking Down Corporate Identification Number

A CIN is a 21-character alphanumeric code that reveals key details about a company. It is structured into six sections, each offering specific information that aids in company identification and regulatory tracking by the ROC and the MCA. Here’s a breakdown:

Section-1: Listing Status

The first character indicates whether a company is “Listed” or “Unlisted” on the stock market.

  • L: Listed on the Indian stock exchange.
  • U: Unlisted.

Section-2: Industry Classification

The following five numeric digits represent the company’s primary economic activity or industry. The MCA assigns each category of economic activity a specific code. For example, 12345 could signify a particular industry, such as technology or healthcare.

Section-3: Registration State

The following two letters identify the state where the company is registered. Examples include:

  • TN: Tamil Nadu
  • GJ: Gujarat
  • UP: Uttar Pradesh

This section functions similarly to state codes in vehicle registration numbers.

Section-4: Year of Incorporation

The next four numeric digits represent the company’s year of incorporation. For example, "2015" signifies that the company was established in 2015.

Section-5: Company Classification

The following three characters indicate the company type. Examples include:

  • PLC: Public Limited Company
  • NPL: Not-for-Profit Organisation
  • SGC: State Government Company

Section-6: Unique Registration Number

The last six digits are the company’s unique registration number, assigned by the ROC to distinguish it from other entities.

CIN number example: U12345TN2015PLC789101

This example shows an unlisted company (U) operating in a specific industry (12345), registered in Tamil Nadu (TN), incorporated in 2015 (2015), classified as a public limited company (PLC), with a unique registration number of 789101.

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Abbreviations in CIN Number

The abbreviations used in Section 5 of the CIN include:

  • FLC: Financial Lease Company as Public Limited.
  • FTC: Private Limited Company Subsidiary of a Foreign Company.
  • GAP: General Association Public.
  • GAT: General Association Private.
  • GOI: Government of India-owned companies.
  • NPL: Not-for-Profit License Company.
  • PLC: Public Limited Company.
  • PTC: Private Limited Company.
  • SGC: State Government-owned Companies.
  • ULL: Unlimited Liability Limited Company.
  • ULT: Unlimited Liability Trust.

Usage of Corporate Incorporation Number

The CIN is essential for ensuring compliance and maintaining legitimacy. It must be used in the following:

  • Invoices: To identify the company in financial transactions.
  • Notices: For official communication with stakeholders.
  • Letterheads: To reflect the company’s legal identity in correspondence.
  • Annual Reports: As a mandatory disclosure for regulatory purposes.
  • MCA e-forms: To ensure accurate filing with the Ministry of Corporate Affairs.
  • Publications: For transparency in public-facing materials.

Using the CIN correctly ensures smooth corporate communication and compliance with Indian legal requirements.

Penalty for Non-Compliance of Mentioning CIN Number

Failing to comply with the requirement of mentioning the CIN on official documents can lead to significant penalties. If the requirements are not met, the defaulting company and its officers in default face a penalty of ₹1,000 per day, continuing until the non-compliance is rectified. The maximum penalty for such defaults is capped at ₹1,00,000. These penalties ensure strict adherence to regulatory norms and maintain transparency in corporate operations.

Changing Corporate Identification Number

You cannot directly change the Corporate Identification Number (CIN), but it automatically updates when specific changes occur in your company’s status or structure. These changes include:

  • Listing Status: The CIN updates automatically if your company transitions from private to public or is delisted. For example, a Private Limited Company converting into a Public Limited Company will update its CIN to reflect the new listing status.
  • Registered Office Location: Moving your company’s registered office to another state will result in an updated CIN to match the new state code. For example, if your company relocates its registered office from Maharashtra to Karnataka, the CIN will change from 'MH' to 'KA'.
  • Industry or Sector: A change in your company’s primary business activity will update the industry classification in the CIN. For example, a company shifting from software services to financial services will modify its CIN to reflect the new industry.

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Frequently Asked Questions

How to apply for CIN?

A CIN is automatically assigned to a company during its registration with the Registrar of Companies (ROC). You do not need to apply for it separately. Ensure you complete all registration requirements with the Ministry of Corporate Affairs (MCA).

How do I find my company's CIN number?

You can find your company’s Corporate Identification Number (CIN) on the MCA website by following these steps:

  1. Visit the MCA website.
  2. Click on the 'MCA Services' tab on the homepage.
  3. From the 'Company Services' dropdown, select 'Find CIN'.
  4. Choose the 'Search Based on Existing Company/LLP Name' option.
  5. Enter the company name in the 'Existing Company' field, complete the captcha, and click 'Search'.

Is CIN allotted to LLP?

No, CIN is specific to companies registered under the Companies Act. Limited Liability Partnerships are assigned a unique identification called an LLPIN instead of a CIN.

What is an example of a corporate identity number?

An example of a CIN is U12345MH2020PTC098765, where:

  • U indicates an unlisted company.
  • 12345 represents the industry.
  • MH denotes Maharashtra as the state of registration.
  • 2020 is the year of incorporation.
  • PTC indicates a private limited company.
  • 098765 is the unique registration number.

How to get a CIN certificate?

Once a company is successfully registered, the ROC provides a CIN certificate. The certificate includes the CIN and other registration details as official proof of the company’s incorporation.

Are CIN and GST the same?

No, CIN and GST are entirely different. CIN is a company identification number issued during registration, while GSTIN (Goods and Services Tax Identification Number) is related to business tax compliance under the GST Act.

Is mentioning CIN on the company’s invoices, bills, and receipts mandatory?

Yes, the Corporate Identification Number (CIN) must be mentioned on invoices, bills, receipts, letterheads, notices, and other official documents. Non-compliance can result in penalties.

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