What is Corporate Identification Number (CIN)? Definition

CIN or Corporate Identification Number is a unique code assigned to an Indian company when it registers under the Companies Act 2013. It is the one to fully label and record the existence of each business entity legally. Among others, this number ensures that government officials, banks, and others can quickly and accurately determine a company’s identity and authenticity. Companies will receive a social security type of number.

Importance of Corporate Identification Number

Legal Compliance: Every business registered under the Companies Act, 2013 in India needs to procure a CIN as a prior legal requirement. In this way, companies keep within the realm of law and abide by its statutory responsibilities.

Unique Identification: Every featured company is assigned a Unique Company ID, which makes it possible for it to be distinguished from the others. This distinctiveness carries different circumstances for a broad range of legal, regulatory, and business uses.

Transparency and Accountability: CIN concentrates on building trust through the adoption of a uniform approach for disclosing important information on any company to interested parties including government agencies, investors, creditors and clients. This is the way to realize the trust and the accountability.

Regulatory Compliance: Every company should state its CIN on its financial statements, contracts, invoices, and official letters in the order that they are mentioned above. This guarantees that the company is adhering to set regulatory requirements and has direct communication with regulatory authorities.

Business Transactions: Through CIN, business dealings are smoothened by providing a standardized company code; allowing to check the authenticity and genuineness of the company. It facilitates the process of banks, suppliers, and other businesses exchanging due diligence efficiently.

Public Records: CIN is included in the MCA which is publically available in databases across India. These files are open to the public; hence the diverse group of people can get hold of important information about the company’s registration, structure and past of the company.

Example:

Example CIN: U74999DL2021PTC123456

Explanation:

U: The first of the character means the type of the enterprise. In such an example, “U” means that the organization has been set up as a Private Limited liability Company.

74999: The next five digits are the industry code or the ERC equivalent. These numbers are designated to the business activity that the company is especially concerned about.

DL: The succeeding two characters denote the U.S. state code where the company is based in. In this instance, “DL” is the shortcode for Delhi.

2021: The next four digits represent the year of incorporation of the company. In this example, it indicates that the company was incorporated in the year 2021.

PTC: In the next group of characters, the company’s classification is written. “PTC” usually means “Private Company Limited,” and the abbreviation “Ltd” is used after the company name.

123456: The last six numbers specify the unique registration number assigned to the business by RoC. It is a consecutive number that is considered as an identifier to be apart from the others which have the same state and year of registration.

Hence, this CIN means that it’s a firm which is owned by fewer people and was registered in Delhi in 2021 with the unique registration number 123456.

Usage of Corporate Identification Number(CIN)

1. Providing a unique identifier for companies, that complies with the rules of the Companies Act, 2013.
2. It plays a big role in both company recognition and differentiation.
3. Promotes transparency by giving the stakeholders a standardized identification for them to be able to verify the credibility of the product.
4. Useful for different legal documentation, filings, and regulator interactions.
5. Enables flawless business transactions by ascertaining the authenticity and realness of firms.
6. Registration is kept in public registries, giving people the ability to see information related to the company’s registration and history.
7. It is imperative for the completion of certain procedures such as dealing with government agencies, tax authorities, and regulatory bodies.
8. Utilized by banks and financial institutions to conduct customer verification and checking.
9. Contracts, agreements, and correspondence officials may use it for identification and referencing.
10. Plays a role of trust and reliability in the corporate environment by providing standardized means of identification and verification.

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