Ease of doing business: No need for certificate of commencement of business for companies

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Ease of doing business:

No certificate of commencement of business required for companies

The government has done away with this requirement, taking another step to ease doing business in India.

The Cabinet, chaired by Prime Minister Narendra Modi, had approved the 14 changes in various provisions of the new Companies Act, 2013 under the Companies (Amendment) Act, 2015.

One of the changes brought with reference to Commencement of Business Certificate is as below:

SECTION EARLIER PROVISION

 PROVISIONS AFTER AMENDMENT

11

 Commencement of Business. No requirement of Commencement of Business Certificate. Section 11 shall be omitted.

 

Many promoters have been asking for the clarification as, earlier companies having share capital shall not commence any business or exercise any borrowing powers unless –

Declaration shall be filed in Form No INC 21 by a Director and the content of the form shall be verified by Practising Professional (CS/CA/CWA) stating that every subscriber has paid the value of shares agreed to be taken and paid up capital is not less than statutory limit;

and

Following documents needs to be attached with the Form No INC 22

  • Registered document of the title in name of Company; or
  • Notarised copy of Lease/rent agreement along with rent paid receipt (Rent receipt shall not be older than 1 month); or
  • Authorisation from Owner to Company along with proof of ownership for use of premises as Registered Office (NOC can be submitted for this); and

Proof of evidence of any utility service like gas, electricity, telephone etc. in the name of owner (not older than 2 months)

The Cabinet, chaired by Prime Minister Narendra Modi, has made the meaningful change in various provisions of the new Companies Act, 2013, which came into force with effect from April 1, 2014, inter-alia, about the Commencement of Business Certificate and now, the government has done away with this requirement, taking another step to ease doing business in India.

How to read the Corporate Identification Number CIN of a company

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How to read the CIN of a company:

You would have come across some long alphanumeric numbers of companies called CIN.

The CIN (Corporate Identification Number) of a company is given as unique code of alphanumeric characters, which, every company that is incorporated in India is given as unique code at the time of its incorporation and this is the Corporate Identification Number (CIN) of that company. This code is given irrespective of whether the company is a private company, public company or listed company or One Person Company.

 

What CIN represents:

​CIN is an alphanumeric 21 digit code given to companies. It stores vital information to represent a company.  For example, a CIN would read something like this: U72300MH2014PTC097368. The CIN Number given in the above example is divided into 6 parts. Each part contains information about the Company:

 

  1. First Digit represents the listing status – A Company may be either listed or unlisted. First Digit of the CIN indicates the Listing status of the company. If the company is listed, it will be mentioned “L”, if the company is unlisted, it will be mentioned “U” as the first digit of the CIN.

 

  1. Next Five Digits represents the Industry Code – Depending on the business line the company belongs to, the Company selects an industry in which it operates. Accordingly, a relevant industry code is allotted to the company.

 

  1. Next Two Digits represents the State Code – These digits represent the State in which the registered office of the company is situated. This helps us know which Registrar or ROC is applicable with respect to the company.

 

For Example: If the company has been registered in Tamil Nadu in the above example “TN” and in case a company is situated in the state of Maharashtra, the Code would be “MH”. In case, the company shifts its registered office to some other place later, the CIN would change due to change in the State Code.

 

  1. Next Four Digits represents the year of incorporation of the Company – These digits represents the year in which the company was incorporated. By looking at the CIN of the company, one can tell that the year in which the company was incorporated.

 

  1. Next Three Digits represents the type of the company – These three digits identify the type of the company. A company may be any of the following:

– Public Limited Company (PLC)

– Private Limited Company (PTC)

– Government of India Company, Centre (GOI)

– One person Company (OPC)

– Company of State Government (SGC)

– Section 8 Company – Not for Profit (NPL)

 

  1. Last Six Digits – These last 6 digits represent the ROC Registration Number of the company. They are unique numbers given to every company at the time of incorporation by the ROC in which they are registering. This number depends on the ROC in which the company is registering and also the Industry to which has been associated with.

 

This is what the 21 digit CIN Code comprises of. Next time, you see CIN of a company, there would be many things that you should be able to read easily.

You can look for CIN of the companies in a corporate directory. CIN is also mentioned on the letter head of the company.

 

Would a Company’s CIN ever change?

 

Yes. CIN is the number with which we identify a company. Typically CIN is to remain with the company for a lifetime but in, few cases, the CIN of the company could change:

* Change in State where registered office of the company is situated

* The listing status of the company changes

* The industry of the company changes

* The company becomes public limited from private limited or vice versa