Once a private bank was sifting its corporate client list using PAN numbers. To their surprise, they found the names of 15 clients registered under a single PAN. In effect, 15 different versions of its name had led to the client’s name being registered differently by the bank officials. Company identifiers are a valuable database tool that banks and corporations can strategically use in various areas, including CRM and risk management. In this blog, we will explore some of the essential company identifiers.
5 Company Identifiers You Should Know About
1. CIN (Corporate Identification Number):
CIN or Corporate Identification Number is a 21-digit alphanumeric code the Registrar of Companies (ROC) assigns to companies registered in India. It is provided to all companies, including private/public limited companies, one-person companies, companies owned by the Government of India, and State Government companies. However, for Limited Liability Partnerships (LLP) registered in India, a separate seven-digit identification number called the LLPIN (Limited Liability Partnership Identification Number) is given by ROC.
The 21-digit CIN is easily translatable and helps in finding basic information about the company. For example, the first letter indicates the type of company, while the next five characters denote the state in which the company is registered. Furthermore, the subsequent section reflects the industry of operation, providing a snapshot of its business sector.
Moreover, any change in listing status, location, or industry of operation and you get a whiff of it from its CIN status. This makes CIN an essential tool for compliance checks and due diligence during mergers, acquisitions, or partnerships.
2. GSTIN (Goods and Services Tax Identification Number):
GSTIN is an abbreviated form of Goods and Services Tax Identification Number that is allotted by GST Network after applying for the GST registration.
GST is a destination-based indirect tax levied on the supply of goods and services. A company operating in two or more states applies for a separate 15-digit GSTIN number in each state. The structure of the GSTIN is highly informative:
-The first two digits represent the state code as per the Indian Census.
-The next 10 digits are derived from the company’s PAN.
-The 13th digit denotes the number of registrations the business entity has for its business verticals in the state.
For instance, if the business gets a GST number for its fourth business vertical in the state, its 13th digit will be 4. This detail allows businesses and tax authorities to keep track of an entity’s operations across different geographies or verticals.
Additionally, GSTIN aids in determining the company’s compliance status, helping businesses select reliable partners or suppliers.
3. PAN (Permanent Account Number):
A Permanent Account Number or PAN is a 10-digit alphanumeric number that contains vital information about the PAN cardholder and is arguably the most popular company identifier.
PAN acts as the financial identity of an entity and is required for various tax-related transactions. For instance, an entity might have multiple GSTIN registrations due to its operations in different states or due to its operations in multiple business verticals in a single state. However, all such GSTINs have to be compulsorily linked to the same PAN of the entity.
This linking ensures a consolidated financial view of the entity, making it easier to assess tax compliance and financial health. In banking, for example, PAN can be used to identify the lending exposure of a bank to a single business group, ensuring no financial discrepancies.
4. LEI (Legal Entity Identifier):
From the 1st of April 2021, this 20-digit Legal Entity Identifier or LEI was made mandatory for all payment transactions of value ₹50 crore and above undertaken by entities (non-individuals) using centralized payment systems like RTGS and NEFT.
LEI is globally recognized and designed to provide transparency in financial transactions. It connects key information about an entity to facilitate cross-border transactions and reduce risks in the global financial system. In addition to being used in banking, LEI helps in managing credit risk and monitoring systemic risk within the financial ecosystem.
Entities receiving or initiating transactions above the specified threshold need to get the LEI number from the Legal Entity Identifier India (LEIL).
5. TAN (Tax Deduction and Collection Account Number):
Tax deduction and collection account number or TAN is a 10-digit alphanumeric identifier. It is compulsory to obtain TAN for individuals or businesses mandated by the Government to collect or deduct tax.
TAN serves a critical role in tax compliance, ensuring proper deduction and deposit of taxes by entities. For organizations with multiple branches, obtaining different TANs for each division streamlines tax deduction and deposit processes.
You can verify the TAN of anyone using the Income Tax Department’s website to ensure deductions for payments made to you were rightfully and legally done. This verification process enhances trust in financial dealings.
Why Are These Identifiers Important?
Corporate identifiers like CIN, GSTIN, PAN, LEI, and TAN are not just compliance tools but also strategic assets for businesses. They help organizations:
1. Ensure Accurate Recordkeeping: By maintaining standardized identifiers, businesses can avoid duplications, errors, or inconsistencies in records.
2. Streamline Risk Assessments: Banks and financial institutions rely on these identifiers to monitor exposure and mitigate risks effectively.
3. Facilitate Business Growth: Easy access to reliable company data aids in partnerships, mergers, and expansions.
4. Boost Tax Compliance: Identifiers like GSTIN, PAN, and TAN simplify tax reporting and reduce the risk of penalties.
The Approach
The Ministry of Corporate Affairs (MCA) website provides CIN-based details, while the Income Tax website offers information about PAN and TAN. GSTIN-related company details can be found on the GST government website.
Additionally, several cloud-based data providers integrate all these identifiers and present them in an intuitive format. Leveraging such platforms ensures businesses have access to verified data for decision-making, reducing manual effort and enhancing efficiency. By using these identifiers strategically, businesses can improve operational accuracy, ensure compliance, and build strong partnerships.
Access Company History with Probe42
With over a decade of experience in handling data, we enable you to make better and faster business decisions. We bring you Probe42, a new-age product that specializes in integrating information. It can be leveraged by several users, including banks, businesses, professionals such as CAs and lawyers, and fintechs or loan origination agencies.
We collect data from 740+ validated public domain sources to get the most up-to-date and wide-ranging spread of information. Then, this data is cleaned using fine-tuned algorithms and QA experts to make sure it is verified and ready for your needs.
Finally, we curate this highly accurate data for optimal presentation and seamless end-usage, so you can get quick access without having to decipher it. Probe42 is designed to provide valuable information and insights for making informed business decisions and conducting due diligence. Learn more about the many benefits of Probe42 at: https://probe42.in/products/business.html
Frequently Asked Questions (FAQs)
1. How can company identifiers help in reducing financial risk?
Company identifiers like CIN, GSTIN, PAN, TAN, and LEI provide accurate data for assessing a company’s financial health, tax compliance, and credit risk. They help banks and businesses avoid duplication errors, monitor exposure, and ensure informed decision-making during partnerships, lending, or investments.
2. What is the difference between CIN and GSTIN?
CIN is a 21-digit alphanumeric code assigned by the Registrar of Companies to identify a company’s registration, location, and industry. GSTIN, on the other hand, is a 15-digit code linked to a company’s PAN and used for tracking GST compliance and tax filings across different states or business verticals.
3. Why is LEI mandatory for transactions above ₹50 crore?
The Legal Entity Identifier (LEI) is mandatory for transactions above ₹50 crore to enhance transparency and reduce systemic financial risks. It provides a standardized global identity for entities, helping regulators and financial institutions track large-scale transactions effectively.
