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10 important terminology used during incorporation of a company in India

Digital Signature & Digital Signature Certificate (DSC)

A Digital Signature is a digital code created for the purpose of affixing them on digital documents and proving equal authority as of the handwritten signature. A Digital Signature Certificate is a prima facie evidence of the signature which validates the authenticity of the signature. The Office of Controller of Certifying Authorities (CCA), issues the DSC only to Certifying Authorities which are the trusted entities who are responsible to issue Digital Signature Certificate to end-user.

Director Identification Number (DIN)

According to the MCA website DIN is a unique Identification Number allotted to an individual who is appointed as director of a company and it is compulsory for every director to have this number so as to create a database of the incorporated companies before they can get a company registered according to section 153 & 154 of the Companies Act, 2013. It can be obtained by filing the requisite form and prescribed fees with the Ministry of Corporate Affairs India (MCA).

Permanent Account Number (PAN)

PAN or Permanent Account Number is a mandatory document which an individual has to obtain for taxation purposes. It may be obtained through e-filing on the website of the Department of Income Tax.

Tax Deduction Account Number (TAN)

TAN or Tax Deduction Account Number is to be obtained by the person responsible to deduct tax, that is, the deductor.  Application for new Tax Deduction Account Number can be done through online Form 49B by Income Tax Department.

Memorandum of Association

Memorandum of Association (MOA) is considered as the supreme document of the company and is submitted to registrar at the time of incorporation. The purpose of this is to lay down clear objectives of the company and the business that they tend to carry out under this company. It is advisable for a company to take legal help while drafting the Memorandum of Association. It has the following clauses:

  1. Name clause
  2. Registered Office Clause
  3. Object Clause
  4. Association Clause
  5. Capital Clause
  6. Liability Clause

Articles of Association

Articles of Association is a document containing all the rules and regulations that govern a company. This document has to be submitted to Registrar at the time of incorporation of a company.

Share Capital

When the total capital of a company is divided into shares, then it is called share capital. In other words, the capital for the running of the business collected by the company is known as share capital. Share capital is the total amount of capital collected from its subscribers or shareholders for the purpose of achieving the objectives of the company.          

Authorized Capital

According to Section 2(8), it is the capital as authorized by the memorandum of a company to be the maximum amount of share capital of the company.

Paid-Up Capital

According to Section 2(64) it means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called. Minimum paid-up capital for Private Companies is INR 1 lakh and Public Companies is INR 5 lakhs.

For more information on incorporation of different types of business entities please write to us at info@ssrana.com or submit a query.

To know more about incorporation of company in India, Read below

Company Law in India

Company Formation in India

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