A Glossary of Terms used in Company Incorporation
Author :Editorial Team | in
Category : Company Incorporation Published : 06-05-2024
Updated : 15-10-2025
Overview : Incorporating a company in India is a mandatory requirement under Companies Act 2013. However, the process of incorporation involves several legal formalities and technicalities that are quite difficult to comprehend, for entrepreneurs who lack knowledge and experience in the field. As a result, they often make silly and common mistakes in registering their companies, which in turn lands them in a pool of hefty fines and penalties.
We are writing this article with the purpose of educating our readers about the basic terms and concepts frequently used in the procedure of company incorporation in India. Our goal is to enhance their knowledge in the field, and reduce their proneness to errors in setting up and registering their private limited companies in India.
Company Registration Cost
- Director DIN
- Company Name Approval
- Filing Incorporation Forms
- Company PAN & TAN
- Digital Signature
- Drafting MoA & AoA
- Certificate of Incorporation
- 100% Online Process
1. DSC
DSC or Digital Signature Certificate is an encrypted and digital form of a signature that is used to sign several online forms, including the form for company registration. It can be obtained by filing an application form to the Certifying Agencies, licensed by the Ministry of Corporate Affairs, to issue DSCs.
2. DIN
Every director is allotted a unique and permanent identification number by the Ministry of Corporate Affairs, known as a Director Identification Number (DIN). No individual can be appointed as the director of a company if he does not have a company DIN. A DIN can be obtained by filing an application to the Ministry of Corporate Affairs in form DIR 3 or PART B of the SPICe+ application.
3. Company Name
The name of a company has to be unique and communicative of the brand and business activity of the company. It should not be the same, similar, or deceptively identical to the name of an already existing company, an applied, or registered trademark.
4. MOA
The Memorandum of Association (MOA) is one of the foundational documents of the company, which contains its basic details including name, registered office address, object, liability of owners, and capital of the company.
5. AOA
The Articles of Association (AOA) of a company contains rules and regulations for the internal management and administration of the company.
6. Promoters
The group of people consisting of proposed directors and shareholders who conceive the very idea of setting up a company are known as its promoters.
7. Shareholder
The shareholders share ownership of the company by investing capital into it, for which they receive guaranteed returns. Their liabilities are determined by the unpaid amount of shares.
8. Director
Directors are appointed by shareholders to manage the affairs of the company and make day-to-day decisions regarding operations and management.
9. Board of Directors
All directors of a company collectively form its board of directors, responsible for key decisions through meetings and resolutions.
10. Authorised Capital
Authorised capital is the maximum capital decided by shareholders that can be raised by the company for business operations.
11. Subscribed Capital
The subscribed capital of a company is the total worth of shares that the company has sold to its shareholders.
12. Paid Up Capital
Paid-up capital is the actual amount of capital received by the company from shareholders against subscribed shares.
13. Spice Plus Form
The Spice Plus form integrates multiple services including name reservation, incorporation, DIN, PAN, TAN, GST, and more.
14. MCA 21
The MCA 21 is the flagship e-governance project by the Ministry of Corporate Affairs, digitizing incorporation and ROC compliances.
15. Certificate of Incorporation
The Certificate of Incorporation is conclusive proof that the ROC has successfully incorporated a company.
16. CIN
CIN or Corporate Identification Number is a unique identification number allotted to a company after incorporation.
17. Company PAN
PAN is a unique number allotted by the Ministry of Finance to ensure income-tax compliance of the company.
18. Company TAN
TAN is the Tax Account Number issued by the Ministry of Finance, required for TDS/TCS filing and deduction.
19. Company Bank Account
A company’s bank account establishes its financial identity. It is opened in the company’s name for all business transactions.
20. AGILE PRO
AGILE PRO integrates post-incorporation services like EPF, ESI, GST, PT registration, and opening a bank account.
21. Director’s Declaration
Directors must declare that they are not offenders or insolvent and that all details in incorporation documents are authentic.
22. Employee Provident Fund
EPF is a statutory benefit requiring contributions from both employer and employee for social security.
23. Employee State Insurance
ESI is a mandatory health insurance scheme for employees earning below ₹21,000 per month in eligible companies.
24. Professional Tax
Professional tax is a state-level tax applicable to professionals, employees, and businesses in specific states.
25. Annual Returns
Annual returns are mandatory filings where companies submit their basic details to the ROC every financial year.Related Articles :
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