Apply for Labour Identification Number (LIN)

What is Labour Identification Number (LIN)?

The Ministry of Labour and Employment has come up with a a unique identification number called “Labour Identification Number” for various labour related services. Labour Identification Number (LIN) can be applied online through the Unified Shram Suvidha Portal which is the official portal of the Ministry of Labour and Employment.

The objective is to provide a single window access to the Labour Return related services for Employers/Establishments and other stakeholders.

LIN is a common identifier for:

Registration Process for Labour Identification Number (LIN)

  1. Sign up on the Shram Suvidha Portal

    Sign-up on the Shram Suvidha Portal and a verification link will be sent to your email-id. After verifying, you will be re-directed to a new page for creating your User Id and Password. 

    (Note: Username and Password are case sensitive)

  2. Login to your account

    Login to your account by using the credentials used for signing up.

  3. Navigate to “Apply for New LIN”

    Labour Identification Number registration can be initiated after logging in to your account and clicking on “Apply for New LIN”

  4. Enter Establishment Details

    Enter your:
    a. Establishment Name
    b. Address of Establishment
    c. Establishment Setup Details like, setup date, PAN of the establishment, Establishment Category, and Ownership Type.

    Save draft and click on “Next”.

  5. Enter eContacts

    Further, enter your primary email-id and mobile number and click “Check Verify”. You will be sent a verification link on your email-id. Upon verifying the same, you will be sent an OTP to verify your mobile number.

    You can add multiple eContacts other than the primary eContact.

  6. Contact Person

    Thereafter, on the Contact Person tab, you will be required to enter-
    a. Representation Type 
    b. User Id (You can enter the same User Id you used to create the account)
    c. Upon clicking on “Search User Id”, the name, address, email and mobile number will be auto-filled.

  7. Identifiers

    Now, select any identifier from the dropdown list.

    For example, if you select “Permanent Account Number”-
    a. Enter the name as on the PAN Card in “Name of Identifier”
    b. Next, enter your 10-digit PAN number in “Identifier Value”
    c. Thereafter, enter the date on which the PAN was issued in “Date of Issue”,
    d. Lastly, enter the name of the authority issuing the PAN Card and upload the document.

  8. Entity Relationship

    If you have a related Company which possesses LIN, enter that establishment’s LIN. If you do not know the LIN, you may use the “Know Your LIN” facility to find it.

    In case you do not have a related establishment, you can move on to the next step.

  9. Additional Information

    If your establishment falls under section 2m(i), 2m(ii), or 85, select the appropriate section. However, if your establishment does not fall under any of those categories, click on “N/A”.

    Next, select whether any hazardous activity is conducted in your establishment. Additionally, select whether any dangerous activity is conducted in your establishment.

    Moreover, select if there is any seasonal Operation Type, Power HP.

    Then, enter the number of workers employed in your establishment as of the date and the NIC Code applicable to your establishment.

    Thereafter, enter a brief description of your establishment. 

  10. Acts Applicable

    After entering the additional information, select the Acts applicable to your establishment from the dropdown list.

    Then, enter the date of coverage, that is to say, from the date on which the Act commenced to be applicable to your establishment. Then, click on “Add”

    If you want to select multiple Acts, you can do so following the same procedure.

  11. Attachments

    Next, upload a document from the dropdown list as per your establishment category.

    After doing so, Click on the plus “+” symbol.

    Similarly, you may upload more documents.

    For example, if you are a PLC, you may select “Memorandum/ Articles of Association” and proceed to upload the same.

  12. Summary & Submission

    In this step, you can review and submit your application. 

    Select the office where you want to submit the LIN registration form from the dropdown list.

    If any details are pending, they will be shown in red at the bottom of the page. Next, enter the jurisdiction based on the location of your establishment.

    You can edit the application any time, however, you can edit the registration data after the submission of the form. Although, it is possible to do so after seeking the permission of the Regional head of Office.

  13. Know Your LIN

    Lastly, upon submission, you will receive an email containing an acknowledgement number.

    You can access the “Know Your LIN” facility and enter your establishment details to check whether you have been allotted a LIN.

    Moreover, you can use this facility to check the LIN of other establishments too.

  14. Raise/ Tack queries

    For queries regarding the LIN status, you may raise a new query or follow-up on previous query through the Shram Suvidha feedback portal.

FAQs

What is LIN?

LIN stands for Labour Identification Number and is issued by the Ministry of Labour and Employment

What is the purpose of LIN?

Government of India plans to do away with all employer codes issued by separate labour enforcement agencies such as ESIC, EPFO, CLC(C) and DGMS etc., by replacing them with new Labour Identification Number (LIN).

Private Limited Company ( PLC ) v/s LLP

There are many business forms for entrepreneurs to choose from. Two of the most common business forms are Private Limited Company (PLC) and LLP. Let us understand each of these in detail and also take a look at the differences between the two.

What is LLP – Limited Liability Partnership?

A partnership comprising of two or more partners registered with the Ministry of Corporate Affairs under the LLP act, 2008 is known as the Limited Liability Partnership. It is a more preferable form of organization as it provides benefits of private limited and partnership firm. It is a legal entity separated from its partners and all the partners have limited liability up to the contribution made by them and no partner is responsible for the act of another partner.

What is Private Limited Company?

A minimum of two shareholders, who may be individuals or body corporates acting through their representatives, can start the Private Limited registration procedure. Further, the Directors can be same as the shareholders or subscribers to Memorandum of Association as well as Articles of Association (MOA and AOA). Additionally, it protects the members from unlimited liability at the time of loss or closure of company.

A private limited company has all the advantages of a partnership firm like flexibility, greater capital contribution as well as advantages of limited liability, greater stability and legal entity.

LLP v/s PLC

Features LLP PLC
Limit on owners of business There is no limit on maximum partners There is a restriction of not having more than 200 members
Minimum Contribution Requirement There is no minimum capital requirement  Minimum capital requirement of INR 1 Lakh
Cost of Formation Cost of incorporation is approximately INR 8,000 The cost of incorporation varies from INR 6,000 to INR 30,000 depending upon the number of directors, number of members, authorized share capital and member fee
Requirement of Audit Audit is only required if:
  • Contributions of LLP exceed INR 25 Lakhs or, 
  • Annual turnover of LLP exceeds INR 40 Lakhs
Statutory audit is compulsory 
Compliance Burden Only have to file the annual return and a statement of accounts and solvency Approx 8-10 compliances per annum are required to be made

FAQs

Is it compulsory to file Form 3 for every LLP?

Yes it is compulsory for every LLP to file Form3 for LLP Agreement within 30 days of its incorporation.

Who can become a Director in a Private Limited Company?

Any person who is over 18 years of age can be a Director in any Private Limited Company. There are no limitations in terms of citizenship or residency. Therefore, foreign nationals can also be directors in a Private Limited Company incorporated in India.

Whether a partner or designated partner shall contribute in LLP?

While the addition of a partner in LLP, the Partner or Designated Partner may contribute the amount agreed by and between all the partners including present in any form whether tangible or intangible. However, it is not mandatory to bring capital to LLP.

ESI : Employees State Insurance

The ESI scheme is managed by the Employees’ State Insurance Corporation (ESIC). The scheme provides medical and financial assistance to the employees and their families.

What is ESI?

The ESI scheme is managed by the Employee State Insurance Corporation a government body, and it is governed by the ESI Act 1948. It protects the employee in the case of sickness, disability, physical injury, and more. Moreover, it provides the working individual and his family with medical facilities. Both the employer and employee contribute to ESI and enable Indian employees to take part in a self-financed, healthcare, insurance fund.

ESI Applicability

An individual should meet certain criteria set by the committee to avail the benefits. ESI Scheme shall be applicable to:

  • Any individual working in a non-seasonal factory with more than 10 employees as per Section 2(12) of the ESI Act
  • Employees working in sectors such as shops, hotels and restaurants, newspaper establishments, road-motor transport undertakings, cinemas, preview theatres, private educational and medical institutions with a strength of more than 20 employees

ESI Wage Limit

The existing wage limit of the employee is ₹21,000 per month and if the employee has any disability, the wage limit for coverage is ₹25,000 per month.

There are exemptions to the rule in the case of daily average wages of INR 137. They do not have to contribute to the scheme from their wages. Only the employer’s contribution is paid for such people.

ESI Registration

The registration for employers under the ESI scheme is completely online. Here’s a step by step guide to the ESI registration online:

  • The employer should keep all documents ready for reference
  • An employer must file form 1, available in PDF format on the official website
  • Fill in the form and submit it for registration on the official website
  • Once verified, a registration number, a 17-digit unique identity will be provided. This unique number is required for all filings
  • Employees registered under the scheme get an ESI card after submitting a form with photographs and details of family members

Documents Required for ESI registration

  • PAN card of the business
  • Address proof of business
  • The license obtained under Shop and Establishment Act or Factories Act
  • Basic documents required as per the nature of entity – Articles of Association, Memorandum in case of a company, partnership deed in case of a partnership, and Limited Liability Partnership
  • Details of all directors, partners, and shareholders
  • Details of all employees along with their salary information
  • Bank details

Returns to be filed every year post registration

After the registration, ESI Returns have to be filed twice a year. Documents required for ESI Returns are listed below:

  • Register for Form 6
  • Attendance register of the Employees
  • Inspection book
  • Register of wages
  • Register of any accidents on the premises
  • Monthly returns and challans submitted for ESI

Return Filing Process

On successful registration of the establishment, the employer can file returns online. The login credentials will be available once registered. The same will be required for the online filing of returns. The half-yearly return of ESI for the period April to September is due by 12th November, and October to March is due by 12th May.

In order to file ESI returns online, the employer must follow the below-mentioned procedure:

  1. The employer must log in to the official website using login credentials

    Once he is able to log in to ESIC Portal, there is a list of actions that are available.

  2. To file the return, the employer must first verify if all the employee details are up to date and then file the return

    The employer must then fill the bank details and submit them to file the returns.

  3. The employer can go to the ‘List of Actions’ and ‘Generate Challan’

    You can download the challan and document it for future reference and inspections.

Consequences of non or Late Payment of Employees Contribution

Non-payments, delayed payments, or falsifying payments under ESI Act may attract imprisonment for a period extending up to 2 years and a fine up to ₹5,000. An employer who fails to pay the contribution within the time limit specified in the regulation shall be liable to pay simple interest at the rate of 12% per annum in respect of each day of delay or default in payment of contribution.

Penalty for Non-Payment or Delayed Payment of Contribution

The ESI Corporation may levy and recover damages as per the Regulations, at the following rates, not exceeding the amount of contribution payable for default or delay in payment of the contribution.

Period of delay Rate of damages in % p.a
Less than 2 months 5%
2 to 4 months 10%
4 to 6 months 15%
6 months and above  25%

The employer will be liable for prosecution under Section 85(a) for the first time, and if the employer repeats the offense, he will be liable for enhanced punishment for every repetition.

Wages Definition

The definition of wages under Section 2(22) under the ESI Act, 1952 states that it means all remuneration paid or payable in cash to an employee if the terms of the contract of employment were fulfilled. Some of the inclusions and exclusions from the wage component are as follows:

Inclusions Exclusions
Basic Pay Entertainment Allowance
Dearness Allowance Encashment of leave and gratuity 
House Rent Allowance  Retrenchment Compensation
City Compensatory Allowance Deduction of health insurance
Medical Allowance Tax Deductions
Meal allowance
Any other special allowances
Incentives (including sales commission)
Attendance and Overtime Payments
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ESI Calculation

An employer is liable to pay his contribution in respect of every employee and deduct employees contribution from wages. He shall pay these contributions at the below-specified rates to the Corporation within 15 days of the last day of the Calendar month in which the contributions fall due. The same can be deposited online or to authorized designated branches.

Contributor Contributions
Employee 0.75% of wages paid/payable
Employer 3.25% of wages paid/payable

Example

Let us say Mr. Ansh having wages of Rs. 24,000 works in a processing unit. The contribution will be as follows:
Employee Contribution – 0.75% * 24,000 = 180
Employer Contribution – 3.25% * 24,000 = 780
So a total contribution of INR 960 will be made. The onus of deducting the contribution and depositing the same is on the employer.

Contribution Period and Benefit Period

There are two contribution periods each of six months duration and two corresponding benefit periods also of six months duration as under:

Contribution Period Cash Benefit Period
1st April to 30th Sept From 1st Jan of the following year to 30th June
1st Oct to 31st March of the year following From 1st July to 31st December

FAQ

Can I claim an amount in ESI if I take treatment in private?

As mandated by the ESI Act, treatment has to be taken only from the ESIC hospitals or dispensaries. However, in case of emergency, if the treatment is taken from a private hospital, you can raise a claim with the ESIC subject to ESIC approval.

After resignation ESIC card is valid or not? and how long ESIC benefits could be taken after resigning a job?

For medical treatment, ESIC card is valid from the first date of insurable employment to last date of the corresponding benefit period. However, for cash benefits you need minimum contribution period, if you have minimum contribution period then you can avail ESIC cash benefits in the benefit period.

Can I reactivate ESIC card?

You need to give your old ESIC number to your new employer to reactivate your ESI Pehchan card. Your ESIC card will be reactivated when your new employer pays your ESIC contribution.

Can I withdraw the ESI amount?

ESI is a premium paid for medical benefits. If no benefit is obtained from it, there is no option available to withdraw amount from ESI Account.

Who administers the ESI Scheme?

The ESI Scheme is administered by a statutory corporate body called the Employees’ State Insurance Corporation (ESIC).

How does the scheme help the employees?

The scheme provides full medical care to the employee registered under the ESI Act, 1948 during the period of his incapacity, restoration of his health and working capacity. It provides financial assistance to compensate the loss of his/ her wages during the period of his abstention from work due to sickness, maternity and employment injury. The scheme provides medical care to his/her family members also.

ESIC : Registration, Benefits, and Process

ESIC or Employee State Insurance Corporation is an autonomous body created by the law under the Ministry of Labour and Employment, Government of India. It is a multi-dimensional social system that provides socio-economic protection to workers.

What is ESIC?

ESIC or Employees State Insurance Corporation is a statutory corporate body set up under the ESIC Act 1948 which provides financial coverage to workers against sickness, maternity, disablement, occupational disease, or death due to employment injury. The ESI Act encompasses health-related eventualities that workers are exposed to on a daily basis. It acts as a financial safety net for workers.

Who is Eligible for ESI?

An individual should meet certain criteria set by the committee to avail the benefits offered by Employee State Insurance Corporation (ESIC). The ESI Scheme is applicable to:

  • Any individual working in a non-seasonal factory with more than 10 employees
  • Employees working in sectors such as hotels and restaurants, Newspaper establishments, road-motor transport undertakings, Cinemas, preview theatres, private educational and medical institutions with a strength of more than 20 employees
  • The existing wage limit of the employee is ₹21,000 per month and if the employee has any disability, the wage limit for coverage is ₹25,000 per month
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Benefits of ESIC Registration

There are a number of attractive features and benefits that the Employee State Insurance Corporation offers that are as follows:

  • Medical Benefits: Provides medical benefits to the employees and their family members for coverage of medical expenses
  • Disability Benefit: Provision of financial benefits in the case of temporary or permanent disability to the employee during the time of injury
  • Sickness Benefits: Employees can claim 70% of their daily wages in case of any certified illness for a maximum period of 91 days during the sick leave
  • Maternity Benefit: Under the ESI benefits, ESIC provides the following compensation at the time of maternity:
    • 100% of the daily wages for 26 weeks from the time of going into labour
    • Six weeks in case of a miscarriage
    • Twelve weeks of pay is provided in the case of an adoption
  • Unemployment Allowance: ESI provides a monthly cash allowance for a maximum period of 24 months in case of permanent invalidity due to a non-employment injury or involuntary loss of employment
  • Death benefits: Dependants can claim 90% of the daily wages every month if the employee dies at the workplace
  • Funeral Expenses: Provision of the amount of ₹15,000 for the funeral expenses to the dependents of the family or the people who perform the last rites
  • Furthermore, there are several other ESI benefits the ESIC offers, which are old age care medical expenses, physical rehabilitation, confinement expenses, and vocational training

Entities covered under ESIC

As per the government notification under section 1(5) of the ESI, Act the scheme applies to:

  • Shops,
  • Hotels,
  • Restaurants,
  • Cinemas including preview theatre,
  • Road motor transport undertakings and
  • Newspaper establishment employing 20 or more persons
  • Private Medical and Educational institutions employing 10* or more persons in certain States/UTs

*Note: However the threshold for Coverage of establishments is still 20 Employees in Maharashtra and Chandigarh.

Documents required for ESIC Registration

You need to submit the following documents while registering a company or establishment with ESIC:

  • A registration certificate of the organization
  • Certificate of registration in case of company, and partnership deed in case of a partnership
  • Memorandum of Association and Articles of Association of the Company
  • A detailed list of all employees along with their monthly compensation
  • List of partners, shareholders, and directors of the company or establishment
  • A canceled cheque of the bank account of the company
  • PAN Card of the organization and employees
  • List of directors of the company
  • List of the shareholders of the company
  • Address proof of the business establishment or company
  • A register containing the attendance of the employees

Process of Registration

ESIC registration is completely online. Follow the below steps to register ESIC:

  1. Register on ESIC Portal

    Click on the ‘Sign Up’ button under the ‘Employer Login’ option on the home screen of ESIC Portal. Fill in the details and submit the form.

  2. Confirmation Mail

    Post sign up to the portal, the employer will receive a confirmation mail sent to the registered e-mail id and mobile number entered at the time of sign up. The email shall contain the username and password details for registering as an employer and employee under the ESIC scheme.

  3. Login using username and password received in the mail

    It will redirect to the page having the option of ‘New Employer Registration’. Click on the ‘New Employer Registration’ option.

  4. Select the ‘Type of Unit’ from the drop-down list

    Click on the ‘Submit’ button

  5. Fill in the details in ‘Employer Registration – Form 1’. On completion click on the ‘Submit’ button.

    The Employer Registration Form-1 contains details pertaining to the unit of the employer, details of the employer and employees.

  6. Make payment for Registration

    Post submission of the Employer Registration Form-1, the ‘Payment of Advance Contribution’ page will open. The employer will need to pay the advance contribution for 6 months. Fill in the below details:
    – Amount to be paid
    – Select the payment mode

  7. Receipt of Registration Letter

    – On the successful payment of six months’ advance contribution, the system-generated Registration Letter (C-11) is sent to the employer.
    – It will contain a 17 digit Registration Number by the ESIC department.
    – The Registration Letter (C-11) is a valid proof of registration of the employer.

FAQ

Is it mandatory for employers to register under the ESI?

Yes. It is mandatory that an employer who falls within the eligibility bracket of the ESI scheme register themselves. The factory, company, or establishment should register with the ESIC within 15 days from the registration.

Are the benefits that are granted to the insured employees transferable?

The benefit that the employee is entitled to be passed on to the insured’s dependents in case of the untimely death of the insured employee due to an injury or disease contracted from the work environment.

What is the ESI Code number?

Every employee receives an ESI code number which is a unique 17-digit identification number of a factory or organization. The factory or organization is registered under the coverage of the Act. The ESIC portal generates the 17 digit number after the employer submits their employee’s information.

MCA Enquire Fees

A Company/LLP incorporated or going to incorporate in India requires to file various forms with MCA. These forms include incorporation related forms like SPICe+, RUN as well as Compliance related forms like AOC-4, MGT-7, ADT-1, etc. Filing of these forms requires fees to be paid on MCA Portal itself.

However, the User is not aware most of the times, about the amount of the payment to be made. In this article, we will learn that how can we enquire about the fees to be made with the forms even before filing them on MCA using the ROC fee calculator.


Fees that can be enquired on MCA

One can enquire his Company or LLP related fees on MCA that needs to be paid with the Forms.

  • Name reservation fees for LLP/ Company
  • Incorporation related fees for LLP/ Company
  • Fees for the conversion of LLP/Company
  • Fees of Compliance related forms
  • Refund Form fees
  • Stamp Duty

Procedure to enquire fees on MCA

One needs to follow the below procedure to determine the fees on MCA

  1. Go to MCA Portal

    First, to enquire about the fees visit the MCA Portal.

  2. Enquire Fees

    Click on MCA Services Tab and under the Fee and payment services, select the Enquire Fees option.

  3. Fee Calculator

    A screen will appear showing the MCA Fee Calculator.
    Select Company or LLP to calculate fees.

  4. Select Form

    After clicking on the Company or LLP option, select the Form for which you want to enquire fees.

  5. Purpose

    Next, select the purpose for which you are going to file the selected form.

  6. Other Details

    Enter the other details required to calculate the fees for that particular form.

  7. Calculate Fee

    At last, click on ‘calculate fee’.
    It will show you the fee applicable.

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FAQs

How can I enquire the fees of Stamp duty to be paid while filing incorporation forms for the Company?

Go to MCA Portal and Click on enquire fee under MCA Services Tab. Click on Companies and select the SPICe Form from dropdown. Select the purpose of filing. Enter the other details required to fill. At last click on Calculate fee. It will show the Stamp duty payable for the incorporation of your Company.

What is the fees for RUN Form in case of Company?

The fees for RUN Form in case of Company is Rs. 1000

What are the different modes of payment available for making MCA fee payments?

The different modes of payment available to make MCA fee payments are Debit card, Credit card, Net banking, Challan, NEFT or you can also opt to pay later for some services.

Directors – Powers & Duties of Directors Explained

A Company is an artificial person and hence, is not capable to work on its own. As a consequence there is a need to appoint director in every Company. A Director is the person appointed to the Board of a Company. Director is responsible for management of the Company of which he is a director. Board of Directors refers to the collective body of directors who are in charge of smooth running of business.

Who can be a Director?

Managing a Business is not an easy task. Therefore there are eligibility criteria for a person to become a Director.

  • Only an Individual person can become a Director of the Company. A person other than individual is not eligible to become a director.
  • Furthermore, a minor individual cannot become director of Company as he is not eligible to obtain DIN as well as cannot file a valid consent to act as director.
  • At least one director of Company should be Resident of India.
  • Moreover the person acting as Director should be :-
    • of sound mind
    • capable to enter into a contract
    • not an insolvent person.

Powers and Duties of a Director

The Companies Act 2013 defines the powers and duties that a Director should take care of while acting on behalf of the Company. Sections 179 and 166 of Companies Act 2013 prescribes the powers and duties of a Company Director respectively.

Powers of Directors

According to Companies Act 2013, the Board of Directors of a Company has the following powers in the Company.

  • Power to make calls in respect of money unpaid on shares
  • Call meetings on suo moto basis.
  • Issue shares, debentures, or any other instruments in respect of the Company.
  • Borrow and invest funds for the Company
  • Approve Financial Statements and Board Report
  • Approve bonus to employees
  • Declare dividend in the Company
  • Power to grant loans or give guarantee in respect of loans
  • Authorize buy back of securities
  • Approve Amalgamation/Merger/ Takeover
  • Diversify the business of the Company

Duties of Directors

Board of Directors acts as agent of the Company. However while acting for Company, Director needs to take care of his duties which are as follows:-

  • To act in good faith
  • Act in accordance with the Articles of Association of the Company
  • To act so as to promote the objects of the Company
  • Act in best interest of the Company and its stakeholders
  • Exercise duties with due and reasonable care
  • To exercise independent judgement
  • Not to get involved in a situation where his interest conflicts with the interest of the Company
  • He cannot assign his office to any other person.
  • Not to achieve undue gain or advantage

FAQs

How can I obtain DIN if I wish to incorporate a company and become its director?

If you wish to incorporate a Company and become director of that Company, you can apply for DIN with SPICe+ as MCA has introduced this new integrated form for incorporation of Company with other services including allotment of DIN.

Can a Company become a Director of another Company?

A Company cannot become the director of another Company. Only an individual can become a director of a Company.

If one wants to incorporate a Private Limited Company with Four Directors, can all the four directors get DIN through SPICe+ Form?

No, all the four directors cannot obtain DIN through Form SPICe+ in this case as this form allows obtaining DIN for a maximum of three directors only. One of the Directors of the proposed Company will need to file Form DIR-3 with MCA for obtaining DIN before the incorporation of the Company.

Certificate of Commencement of Business

Commencement of Business Certificate is the declaration that the Director of the Company needs to file with Registrar of Companies. Moreover this declaration is filed in Form INC-20A within 180 days of the incorporation of the Company.

Basically, this is a declaration filed before commencing the business and exercising borrowing powers by the Company. Company has to comply with Section 10A(1)(a) of Companies Act 2013 and Companies (Incorporation) Rules, 2014 while filing the Certificate of Commencement of Business.

Provisions related to Commencement of Business Certificate


Section 10A of Companies Act provides that all the Companies incorporated after Companies (Amendment) Ordinance 2018 and having Share capital shall not commence business or not exercise borrowing powers unless it complies with some conditions. Those conditions are:-

  • The director of the Company has filed the declaration with Registrar that every subscriber to MoA has paid the amount for the shares held by them. He shall file such declaration within 180 days of Incorporation of Company.
  • Secondly, Company has filed with Registrar the verification of Registered Office of the Company in Form INC-22 as provided in Section 12(2) of Companies Act 2013

Which Companies does not need to file Business Commencement Certificate?

Following Companies does not require to file the Business Commencement Certificate with Registrar:-

  • Companies incorporated before 2nd November 2018
  • Companies incorporated after 2nd November 2018 but is not having Share Capital.

Information and Documents required for the Form

  1. Corporate Identification Number of the Company
  2. Name of the Company
  3. Address of Registered Office
  4. Email address of Company
  5. Attachments
    • Subscribers Proof of payment for value of shares
    • Certificate of Registration issued by RBI or other Regulators (in case the company is regulated by a sectoral regulator)
    • Other Attachments, if any

Certification of Form INC-20A

The Commencement of Business Certificate requires the certification by a Practicing Professional i.e. a Company Secretary in practice/Chartered Accountant in practice/ Cost Accountant in practice.

Procedure to file Commencement of Business Certificate

In case of Company filing the declaration for Commencement of Business, it needs to follow the following procedure:-

  1. Go to the MCA Portal.

    Visit the MCA Portal.

  2. Company forms

    Therefore, under MCA Services Tab, select Company forms download.

  3. Form INC-20A

    A screen will appear with showing Company forms. Scroll down and you will see Form INC-20A for declaration of Commencement of Business.

  4. Download the form.

    Hence, download the form. You can download form with or without Instruction Kit.

  5. Open the Form

    After downloading the form, open it in PDF.

  6. Fill the form.

    Start filling the Form.
    Enter the following details:-
    CIN of the Company
    Name of Company
    Address of Registered Office of Company
    Email address of the Company
    Select whether the affairs of the Company is regulated by any Sectoral Regulator.

  7. Attachments

    Add the Attachments. You can see the attachments in the Box for list of Attachments.

  8. Declaration and Certification

    Fill the Declaration and provide DIN.
    Furthermore enter the details of the Practicing Professional who shall certify the Form.

  9. Check form

    After filling the form, Click on Check.
    As a result, the system will perform the form level validation.
    After the check form is successful, click on Pre scrutiny.

  10. Digital Signature Certificate

    Add the DSC of the Directors and Certifying Professional in the form.

  11. Upload Form

    Again go to the MCA Portal. Login to MCA.
    Under MCA Services tab, click on upload e-forms.

  12. Make payment

    After successful upload, proceed to make payment of the fees.
    On successful payment, SRN will get generated.

Consequences of non filing of the form

In case Company makes default in filing the form, it can lead to the following penalties:-

  • Company shall be liable for penalty of Rupees Fifty Thousand.
  • Furthermore every Officer in default shall be liable to penalty of Rupees One Thousand per day till the default continues. However the penalty shall not exceed the amount of One Lakh rupees.
  • If Company fails to file the declaration and Registrar has reasonable cause to believe that company is not carrying on any business, he may initiate action for removal of name of the Company from Register of Companies.
Annual Compliance Plan for Startups
File the declaration for Commencement of Business and other Compliance related forms for your Company
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Annual Compliance Plan for Startups
File the declaration for Commencement of Business and other Compliance related forms for your Company
[Rated 4.8 stars by customers like you]

FAQs

What is the time limit for filing the form for Commencement of Business?

Company needs to file the declaration for commencement of business within 180 days from the date of incorporation of the Company in e-form INC-20A.

Does the Company gets the Certificate of Commencement of Business from MCA as a result of filing the declaration in form INC-20A?

The form INC-20A for declaration of commencement of business is an auto approved form (STP mode). Company does not get the Certificate for Commencement of Business from MCA by filing the form INC-20A.

Can I start business for my Company before filing the form for commencement of Business?

A Company cannot commence the Business and also cannot exercise borrowing powers unless the declaration is filed with MCA for Commencement of Business.

Private Placement

Section 42 of Companies Act 2013 and Rule 14 of Companies (Prospectus and Allotment of Securities) Rules apply on Private Placement of Securities.

What is a Private Placement?

It means any offer or invitation to subscribe securities to a specified group of persons by a company through the issue of Private placement offer letter. A Company making this offer has to comply with lesser regulatory provisions.

Points to consider while making this Offer

The Company making the Private Placement of Securities needs to consider the following points:-

  • The Offer of securities through this issue can be made to a maximum of 50 persons in a single offer. However, Company can make this Offer to 200 persons or less in the aggregate in a Financial year. (excluding offer to Qualified Institutional Buyers and employees being offered securities under ESOP)
  • Moreover, the company needs to approve this offer in Special Resolution in the General Meeting before making the Offer.
  • Furthermore, the Company needs to circulate a Private Placement Offer letter among the proposed names allotted in Form PAS-4.
  • A Company can issue the Offer Letter only after it files the Special Resolution with ROC in Form MGT-14.
  • In this case, the monies that the Company receives from the offer shall be kept in a separate bank account in a Scheduled Bank.
  • This offer does not carry any right of renunciation. Hence the person to whom the offer letter is addressed can apply for the securities only.
  • In case of this offer, Company can accept the subscription money from this offer either by cheque or demand draft or other banking channels.
  • The Company shall make the allotment within 60 days of receipt of the application money from the subscribers.
  • Furthermore, if the company is not able to allot securities in 60 days, it shall repay the money of applicants within the next 15 days.
  • The company shall file a Return of Allotment to ROC in Form PAS-3 within 15 days of allotment of securities.
  • The company requires to maintain the complete record of this issue in Form PAS-5.

Private Placement Procedure

The following procedure applies in case of Private Placement Offer.

  1. Board Meeting

    Company shall hold the Board Meeting and shall discuss in the meeting following points:-
    Approve the list of persons to whom a Private placement offer shall be made
    Approve Draft Offer letter
    Call the general meeting

  2. General meeting

    The company shall hold the General Meeting to pass the Special resolution for approving the Private placement of shares.

  3. File Special Resolution

    Company shall file Special resolution with ROC in Form MGT-14 within 30 days of General Meeting.

  4. Offer Letter

    The Company shall circulate the offer letter among the proposed allottees to the securities in Form PAS-4.

  5. Application Money

    Company shall keep the application money of Private placement in a separate Bank Account in a Scheduled Bank Account.

  6. Allotment

    The company shall make the allotment of securities within 60 days of receipt of the Application money.
    If the company fails to do so, it shall refund the money within the next 15 days
    If the company fails to refund money then it shall be liable to repay money along with interest @12% p.a. from the 60th day from receipt of application money.

  7. Return of Allotment

    Company shall file return of allotment in Form PAS-3 with ROC within 15 days of allotment.

  8. Share Certificates

    Company shall issue Share certificates within 2 months from the date of allotment

  9. Update the Register of members

    At last, Register of members will be updated by adding the particulars of the new allottees of securities.

  10. Record of Private Placement

    Company shall maintain the complete record of Private Placement in Form PAS-5.

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FAQs

Can a Company accept the money for subscription of securities offered by Private Placement in cash?

No, a Company making the Private placement offer cannot accept the subscription money in cash. It can accept such subscription money only through cheque or demand draft or any other banking channel.

Is it mandatory to file the return for allotment with ROC?

Yes, it is mandatory to file a return of allotment with ROC within 30 days of Allotment of securities in Form PAS-3.

Is it mandatory to take the approval of shareholders in the meeting for making a Private Placement Offer?

Yes, it is mandatory for a Company making a Private Placement offer to take prior approval of shareholders by passing Special Resolution in the General Meeting.

Private Placement Offer Letter


A Private Placement Offer Letter is the document that a Company issues while making a Private Placement Offer to a specified group of persons. Furthermore, when a Company raises capital through Private Placement, it needs to issue this document in Form PAS-4 and circulate it among the identified persons.

Section 42 of Companies Act 2013 and Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules 2014 applies while making Private Placement of securities.

Filing of Private Placement Offer Letter

  • The company needs to file the Private Placement Offer letter cum Application in Form PAS 4. Moreover, it should be serially numbered and addressed to the persons to whom the offer is being made.
  • The company requires to send the PP Offer Letter to the proposed allottees either in writing or in electronic mode.
  • Furthermore, it is accompanied by an Application form while sending to the proposed allottees.
  • However, the Private Placement Offer does not contain the right of renunciation. Hence the person to whom it is addressed can only make the application for the securities of the company through the application form accompanied.

Contents of Private Placement Offer Letter

  1. Information related to the Company
    • Name, addresses, and contact details of the company
    • Name, address, and other details of Directors of the Company
    • Business activity of Company
    • Details of default by Company, in case of any.
  2. Particulars of the Offer
    • Date of Board Resolution
    • Date of Resolution of General meeting approving the offer
    • Kind and Class of Securities offered
    • Price of Securities
    • Details of Valuer who values the securities
    • Amount of Capital that Company intends to raise through the offer
    • Terms of raising securities (Duration, Rate of Dividend or interest, Mode of payment, etc.)
    • Proposed Time for which offer letter is valid
    • Purpose and objects of raising Capital
  3. Disclosures with regard to
    • Interest of Directors
    • Litigation or legal action, if any
    • Remuneration of Directors
    • Related party transactions
    • Summary of reservations or qualifications or adverse remarks of auditors
    • Details of any inquiry, inspections or investigations initiated or conducted
    • Details of acts of material frauds committed against the company and action taken by Company
  4. Financial Position of the Company
    • The capital structure of the company
    • Profits of the company
    • Dividends declared by the company
    • Audited Cash Flow Statement
    • Any change in accounting policies
  5. Required Declaration by Director
  6. Date and Place
  7. Attachments
    • Copy of Board Resolution
    • Copy of Special Resolution
    • Optional attachments, if any
Form PAS-4 Private Placement Offer Letter
Download Form PAS-4 directly from here
Download
Form PAS-4 Private Placement Offer Letter
Download Form PAS-4 directly from here
Download

FAQs

Does the Private Placement Offer Letter carry any right of renunciation?

The Private Placement Offer letter does not carry any right of renunciation. The person to whom the offer is made by the company can either accept the offer or reject the offer.

To how many persons can Private Placement offer be made?

The Private Placement Offer can be made to a maximum of 50 persons through a single offer. However, in a particular Financial year, this offer can be made to an aggregate of 200 persons.

Can a Company make a new Private Placement Offer without completing the existing offer?

No, a Company is not allowed to make another Private Placement offer unless it completes the existing one.

LLP Agreement – An Overview

As per the Limited liability Partnership Act, the filing of the LLP Agreement is compulsory within 30 days of incorporation of the LLP. It is filed with Registrar in LLP Form 3 which is available on MCA Portal.

What is LLP Agreement?

Limited Liability Partnership Agreement is a written agreement executed among the partners of a Limited Liability Partnership or between LLP and its partners. It defines the mutual rights and duties of the partners of LLP.

Purpose of LLP Agreement

Limited Liability Partnership Agreement also called as LLP Deed is the legal document that has the following purposes:-

  • It is the foundation of the firm.
  • This document contains the mutual rights and duties of all the partners of the LLP.
  • It describes the roles and responsibilities of the partners in LLP.
  • It defines the ratio of contribution by partners in the LLP.
  • This agreement defines the share of profit or loss that the partners will share in the LLP.

Contents of LLP Agreement

It contains the following information:-

  1. Name of the LLP
  2. Purpose and object of LLP
  3. Duration of LLP, if any
  4. Place of business of LLP
  5. Name of the Partners of LLP
  6. Contribution of partners and their profit sharing ratio
  7. Date and place of agreement
  8. Mutual rights of the partners
  9. Duties of partners
  10. Provisions related to
    • Books of accounts of LLP
    • Admission of new partner
    • Retirement of partner
    • Cessation of partner
    • Resignation of Partner
    • Restriction of the authority of partner
    • Resolution of disputes
    • Winding up of LLP

Provisions in absence of LLP Agreement

This Agreement defines the mutual rights and liabilities of the partners of a Limited Liability Partnership. However, if an LLP does not have a deed then the provisions of Schedule I of the LLP Act 2008 apply.

Schedule I of LLP Act 2008 contains the following provisions:-

  1. Equal sharing of Profits/ Losses of the LLP
  2. Every partner may take part in the management of LLP
  3. No partner will get any remuneration for management of LLP
  4. Prior permission will be taken from all the partners while induction of the new partner in the LLP.
  5. LLP shall indemnify each partner in respect of payments made in the ordinary conduct of the business of LLP
  6. LLP shall take a decision on any issue or matter only by passing a resolution with the majority of the partners of the LLP.
  7. However, in case of any change in the nature of LLP, it will require the consent of all the partners of LLP.

Procedure to file LLP Agreement

First, draft the LLP Agreement for attaching in LLP Form 3. This Agreement is filed through the following procedure.

  1. Go to MCA Portal

    Firstly, log in to the MCA portal.

  2. LLP forms download

    Under MCA services tab, click on LLP Forms download under e-filing.

  3. Download the form

    Under LLP forms, you will find Form 3 of LLP. Click on it and download with or without help kit as per your preference.

  4. Open the Form

    Open the form in PDF. Start filling it.
    Enter the LLPIN of your LLP. Click on Prefill. The details of your LLP will get prefilled.

  5. Place and date

    Enter the place and date of LLP Agreement.

  6. Fill the following details

    Mutual Rights and duties of partners
    Restrictions on authority of partners
    Management and administration of LLP
    Indemnity Clause
    Resolution of disputes between partners and LLP
    Information relating to Voluntary winding up of LLP

  7. Attachments

    Attach the original LLP Agreement
    The attached LLP Agreement should be on stamp duty and should be notarized.
    Attach the other attachments, if any.

  8. Other details

    Enter the details of the professional who shall certify the form.

  9. Check and pre scrutiny

    Once the form is filled, click on check form.
    After the check form is successful, click on pre scrutiny.

  10. Sign the Form

    Furthermore, DSC shall be attached to the form by the partners of LLP and the Certifying Professional.
    Consider the system requirements while attaching DSC.

  11. Upload form

    Upload the properly dated and signed form on MCA Portal.

  12. Make payment

    After the successful upload, proceed to make payment.
    Once the payment is done, receipt will get generated.

FAQs

Where can I get the Form 3 of LLP to file the LLP Agreement?

You can get the Form 3 LLP on MCA Portal. Visit the MCA Portal. Click on MCA services Tab. Under e filing, select LLP forms download. You will find Form 3 of LLP there to download.

Is it compulsory to file Form 3 for every LLP?

Yes it is compulsory for every LLP to file Form3 for LLP Agreement within 30 days of its incorporation.

What will be the consequence in case of non filing of Form3 with MCA?

In case of non filing of Form3 with MCA , a penalty of INR 100 per day is levied for this default.