In today’s interconnected business environment, establishing trust and verifying the authenticity of business entities is essential for fostering successful partnerships and transactions. Corporate Identification Number or CIN verification, a technique used to confirm the validity of firms established under the Companies Act, 2013in India, is a vital instrument in this process.
Verification of CINs guarantees compliance, reduces risks, and enhances trust in business relationships. Let us explore the significance of CIN verification for businesses.
What is CIN? – Understanding its Structure and Components
Before diving into the significance of CIN verification, it’s essential to grasp the concept of CIN itself. CIN stands for Corporate Identification Number and is a unique identifier assigned to registered companies or entities by the Ministry of Corporate Affairs (MCA) in India.
CIN is a 12-digit alpha-numeric code that acts as a distinct identity for each company and is used to verify information about its registration, location, type, and other details.
Here’s a breakdown of the components of CIN:
- Listing Status : The first character of the CIN denotes whether the company is listed or unlisted. Listed businesses start with “L” and unlisted firms start with “U”.
- Industry Code: The following five characters of the CIN denote the ROC industry code. It represents the industry in which the company operates.
Here are a few examples of industry codes:
85121- Medical practice activities
92111- Motion picture production
61200- Inland water transport
01131- Growing of coffee or cocoa beans
18101- Manufacture of all types of textile garments and clothing accessories
51511- Wholesale of computer and computer peripheral equipment
51513- Wholesale of software
72294- Web page designing
- State Code : The two characters in the 7th and 8th position of the CIN represent the state where the company is incorporated.
Here are some examples:
KA- Karnataka
GJ- Gujarat
MP- Madhya Pradesh
MH- Maharashtra
TN- Tamil Nadu
- Year of Incorporation: The four digits following the state code denote the incorporation year of the company.
For example, “2022” would indicate that the business was established in 2022.
- Ownership Type: The next three characters denote the ownership type of the company.
For example,
OPC: One-Person Company
PLC: Public Limited Company
PTC: Private Limited Company
SGC: Companies owned by the State Government
- Registration Number: The final six numbers represent the registration number of the company issued by the RoC.
Let’s take an example of a hypothetical company with the CIN:
U15545DL2021PTC051236
Here is what the characters represent:
Unlocking Trust: The Importance of CIN Verification
CIN verification holds significant importance for businesses across various sectors due to several reasons:
- Legal Compliance : Verifying a company’s CIN ensures that it is legally registered with the relevant authorities. This lowers legal risks for organizations by helping them avoid engaging with non-compliant firms.
- Due Diligence : It allows businesses to conduct due diligence before transacting or entering into partnerships with other companies. CIN verification enables stakeholders to authenticate the accuracy of company information provided during business transactions.
- Financial Security : Verifying the CIN of businesses ensures transparency in financial transactions and reduces the likelihood of financial losses due to fraudulent activities or misrepresentation.
- Risk Mitigation : Businesses can reduce the risks of financial fraud, identity theft, and regulatory non-compliance by checking the CIN of potential partners or vendors. It helps safeguard the company’s and its stakeholders’ interests by preventing collaboration with potentially harmful business relationships.
CIN Verification API – How Does It Simplify Business Verification?
CIN Verification API is a software interface that businesses can use to verify the authenticity and validity of a company. It verifies the validity of the CIN associated with a given registered company against databases or systems maintained by government or regulatory authorities.
Businesses can conduct CIN online verification using the API and gain access to CIN-related information about the company in real time.
SignDesk’s CIN verification API allows businesses to verify vendors, merchants, suppliers, distributors, and other companies before partnering with them. Doing so ensures that you engage with legitimate entities, mitigating the risks of fraud, financial losses, and reputational damage.
What Data Can Be Retrieved With CIN Verification API?
SignDesk’s CIN verification API retrieves comprehensive data related to the company’s registration and legal status. Some of the key data points that can be retrieved include:
- Company Name : The official name under which the company is registered with the RoC.
- Date of Registration : The date when the company was incorporated and registered with the RoC.
- State : The state where the business is incorporated and conducts business.
- Registrar of Companies (RoC) : The jurisdictional RoC office responsible for regulating and maintaining company records.
- Company Category : The company’s classification based on its legal structure, such as public limited company, private limited company, etc.
- Subcategory : Additional classification criteria based on the company’s specific characteristics or industry sector.
- Type of Company : The legal form of the company, such as a company limited by shares or a company limited by guarantee.
- Class : The category of the company based on its authorized capital, such as Class A, Class B, etc.
- Authorized Capital : The maximum amount of capital the business is permitted to raise by issuing shares.
- Paid-Up Capital : The amount of capital the company’s shareholders contribute.
- Number of Members : The total number of people associated with the company as shareholders or members.
- Company Directors : Details about the directors or other vital individuals running the business.
How Leveraging CIN Verification API Helps Businesses
Businesses can benefit from the CIN verification API in a number of ways.
- Automated Verification – Instead of verifying CINs manually, companies can incorporate CIN verification API to automate the process. Doing so helps save manual effort and time, especially when handling a large volume of CINs.
- Accuracy and Reliability – The API ensures accurate verification results by accessing up-to-date data directly from official databases or authoritative sources. This reduces the risk of errors or discrepancies in CIN validation.
- Compliance Assurance – By using the API to verify CINs and confirm the legitimacy of entities, businesses can ensure compliance with regulatory requirements.
- Enhanced Security – The API provides a layer of security by verifying the authenticity of registered companies and enables businesses to mitigate the risks associated with unauthorized companies.
- Improved Efficiency – Integration of CIN verification API streamlines the verification process, leading to enhanced operational efficiency. Businesses can quickly validate CINs during client, vendor, and merchant onboarding, partner verification, or financial transactions without manual intervention.
Streamline Business Verification With SignDesk’s CIN Verification API
By leveraging SignDesk’s CIN verification API, companies can access crucial information about a business they want to partner with, including their registration details and more. This comprehensive automated verification process empowers them to make informed decisions, establish trust with their partners, and safeguard their interests effectively.
With SignDesk’s CIN verification API, businesses can streamline their onboarding processes, fortify due diligence measures, and foster secure and reliable partnerships. SignDesk also provides a robust Know Your Business (KYB) solution to improve due diligence measures further. Together, these tools empower businesses to streamline their onboarding processes, establish trust with partners, and foster secure and reliable collaborations.
Experience the efficiency of SignDesk’s CIN verification API and KYB solution by booking a free demo today.