Selling on Amazon India is a massive opportunity, but it also comes with strict tax, legal, and operational compliance requirements. Whether you are a new or experienced seller, staying compliant is essential to avoid penalties, account suspension, or payment holds.

This complete guide explains GST compliance, TDS rules, Amazon reports, accounting requirements, trademark/FSSAI registrations, return reconciliation, and annual compliances every Amazon seller must follow.

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1. Business Registration Requirements

You can sell on Amazon under:

• Proprietorship
• Partnership Firm
• LLP
• Private Limited Company

Amazon does not allow unregistered individual selling for most categories.
For scaling, LLP or Pvt. Ltd. is preferred due to better compliance management and brand credibility.

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2. GST Registration & Compliance

2.1 When is GST Mandatory for Amazon Sellers?

GST registration is required when:

• You sell goods online
• You sell outside your state (inter-state supply)
• Amazon collects TCS under GST

Threshold exemptions do not apply for e-commerce sellers.

2.2 Monthly GST Returns

Amazon sellers must file:

• GSTR-1 – outward sales
• GSTR-3B – tax payment summary
• GSTR-2B reconciliation – purchase credit reconciliation

2.3 Amazon GST Reports

You must reconcile:

• Sales reports
• Returns
• Commissions
• Shipping charges
• Packaging fees
• Refund adjustments

Accurate reconciliation ensures correct ITC and avoids mismatches during GST audits.

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3. TCS & TDS Requirements for Amazon Sellers

3.1 GST TCS by Amazon

Amazon deducts TCS @ 1% on your net sales and deposits it into your GST portal.
You must claim this credit during GST filing.

3.2 194-O TDS (Income Tax)

Under Section 194-O, Amazon deducts TDS @ 1% on gross sales.
This TDS reflects in your Form 26AS and reduces your income tax liability.

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4. Invoicing & Accounting Compliance

4.1 GST-Compliant Invoices

You must issue invoices containing:

• GSTIN
• HSN code
• Tax rate
• Seller details
• Product details
• Amazon shipment ID

4.2 Books of Accounts

Amazon sellers must maintain:

• Sales register
• Purchase register
• Expense ledger
• Stock/inventory records
• Amazon fees and commissions
• Return and refund registers

These records are compulsory under GST and Income Tax.

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5. Amazon Category-Specific Compliance

Depending on your product category, you may need additional licenses:

5.1 FSSAI License

Required for:

• Food
• Beverages
• Supplements
• Consumables

5.2 Trademark Registration

Recommended for:

• Brand Registry
• Protection from hijackers
• A+ content creation

5.3 BIS / ISI Certification

Mandatory for:

• Electronics
• Helmets
• Appliances
• Toys

Non-compliance can lead to product removal or account suspension.

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6. Return, Refund & Reconciliation Compliance

6.1 Why Reconciliation Is Critical

Amazon makes adjustments for:

• Returns
• Damaged items
• Reimbursements
• Lost shipments
• Claims

You must reconcile:

• Amazon Settlement Reports
• Orders vs Payments
• TDS/TCS credit
• Inventory mismatches

Proper reconciliation avoids financial loss and tax mismatches.

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7. Income Tax Compliance for Amazon Sellers

7.1 Types of Taxable Income

Your taxable income =
Amazon sales – purchase cost – expenses – Amazon fees – other deductions

7.2 ITR Form Selection

• Proprietorship: ITR-3 or ITR-4 (Presumptive Income)
• Partnership/LLP: ITR-5
• Private Limited: ITR-6

7.3 Tax Audit Rules

Tax audit is applicable if:

• Turnover exceeds INR 1 crore
• OR turnover exceeds 10 crores with digital receipts (95%+)

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8. Annual Compliance Requirements

For Proprietors

• GST returns
• Income tax return
• Books of accounts

For LLP / Company

• Annual ROC filings
• Financial statements audit
• GST filings
• Income tax returns

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9. Penalties for Non-Compliance

Amazon sellers may face:

• GST interest & penalties
• Demand notices
• Input tax credit denial
• Account suspension
• Higher TDS/TCS mismatch notices
• Loss of Amazon reimbursements

Compliance prevents operational and financial disruptions.

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10. How Saving Mantra Helps Amazon Sellers

We provide end-to-end Amazon Seller Compliance Management:

• Business registration (GST, LLP, Pvt. Ltd., FSSAI, Trademark)
• Monthly GST filing & reconciliation
• TDS/TCS management
• Amazon settlement reconciliation
• Income tax filing for sellers
• ROC & annual compliance for companies
• Listing and GST audit preparation

Your compliance is always up to date—accurate, automated, and hassle-free.

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Disclaimer

This article is for educational and informational purposes only. Compliance rules may vary based on business structure, product category, and tax laws. This content should not be treated as legal or tax advice. For personalised guidance, consult a qualified compliance professional. Saving Mantra is not responsible for decisions made based on this article.

Step 1 — Decide which global certification you need

• Identify goals: export market access, regulatory compliance, process improvement, tender eligibility.
• Common standards and typical use cases:
  • ISO 9001 — quality management (manufacturing/services).
  • ISO 14001 — environmental management.
  • ISO 45001 — occupational health & safety.
  • ISO 27001 — information security.
  • CE marking — product conformity for EU.
  • HACCP / FSSC 22000 / BRC — food safety.
• Tip: If unsure, consult with a certified consultant or contact Saving Mantra for a free scoping call.

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Step 2 — Conduct a gap analysis / readiness assessment

• Either perform internally or hire a consultant to compare current systems vs. standard requirements.
• Output: list of missing processes, documents, responsibilities and a remediation plan with deadlines.
• Deliverable: “Readiness Report” or gap matrix.

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Step 3 — Develop documentation and implement required controls

• Create/update: quality manuals, procedures, SOPs, forms, records, policies and job descriptions as required by the standard.
• Assign responsibilities and train staff. Keep version control and logical filing (paper or electronic).
• Tip: Start with a small documentation framework and expand; don’t over-document.

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Step 4 — Run internal audits and management review

• Conduct at least one internal audit to test compliance across departments.
• Management review meeting to evaluate performance, resources, and corrective action plans.
• Fix any issues visible during internal audits prior to external audit.

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Step 5 — Choose an accredited certification body (CB)

• Check accreditation (e.g., NABCB, UKAS, ANAB) and sector experience.
• Request quotations and compare: scope, audit days, fee structure, travel costs, timelines.
• Confirm whether the CB provides multi-site or integrated audits if you’re applying for more than one standard.

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Step 6 — Stage 1 (documentation) audit

• The CB reviews your documentation to confirm readiness for on-site audit.
• Outcome: list of observations / minor nonconformities and confirmation of the Stage 2 audit date.
• Typical duration: 0.5–1 day (depending on scope).

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Step 7 — Stage 2 (on-site) audit

• Auditors verify implementation — interview staff, review records, inspect facilities.
• They will raise nonconformities (major/minor) if requirements aren’t met.
• Typical duration: 1–3 days depending on company size and scope.

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Step 8 — Address nonconformities & receive certification

• For minor nonconformities: submit corrective action plan and evidence within the CB’s specified timeframe.
• For major nonconformities: re-audit or additional evidence may be required.
• Once closed and accepted by the CB, they will issue the certificate (valid usually for 3 years) and schedule surveillance audits.

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Step 9 — Surveillance & recertification

• Surveillance audits are typically annual (or as per CB schedule) to confirm ongoing compliance.
• Recertification usually occurs every 3 years and follows a similar audit cycle as initial certification.

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Documents typically required (example list)

• Company registration (e.g., GST, CIN)
• Organizational chart and list of key personnel
• Scope statement for certification
• Policies: quality, environment, information security, etc.
• Procedures & SOPs relevant to the standard
• Records of internal audits, management reviews, training, and nonconformities
• Product / process flow charts, test records where applicable

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Typical timelines & costs (high-level guidance)

• Timeline: 2–6 months (small organization, simple scope) to 6–12 months (complex/multi-site).
• Costs: Highly variable — consultancy fees, implementation costs, certification body fees, training, and internal resource time. Get 2–3 quotes from CBs and a consultant to budget accurately.

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Common pitfalls & how to avoid them

• Over-documentation: Keep documents practical and used in day-to-day operations.
• Poor top management involvement: Leadership must be visibly engaged.
• Ignoring internal audits: They’re your rehearsal — use them to fix issues before the external audit.
• Choosing the cheapest CB blindly: Ensure accreditation and sector competence.
• Last-minute corrective actions: Spread work with realistic deadlines.

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Practical tips for a smooth registration

• Start with a short internal project plan (owner, tasks, deadlines).
• Use simple templates for SOPs and records.
• Train employees early — auditors will speak to people on the shop floor.
• Keep records well organized and easily accessible during audit days.
• Consider integrated certification (e.g., ISO 9001 + ISO 14001) to save time and cost if applicable.

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How Saving Mantra can help (CTA)

Saving Mantra offers end-to-end support: gap assessments, documentation packages, internal audit support, liaison with accredited certification bodies and pre-audit readiness checks. Contact us for a tailored quote and a free initial consultation.

Contact CTA (for WordPress):
<a href="/contact">Book a free consultation with Saving Mantra</a>

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FAQ (short)

Q: How long is a typical certificate valid?
A: Usually 3 years with annual surveillance audits.

Q: Can I get certified without hiring a consultant?
A: Yes — small companies with competent internal resources often do. Consultants speed up the process and reduce errors.

Q: How soon can I apply after implementing changes?
A: After your internal audit and management review confirm readiness — then approach a CB for Stage 1.

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Suggested WordPress settings & SEO fields

• Meta title: (see top)
• Meta description: (see top)
• Focus keyword: global certification registration
• Slug: global-certification-registration-step-by-step
• Featured image alt text: Business team signing certification documents
• Schema suggestion: Use HowTo or FAQPage schema via an SEO plugin to improve search visibility.

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Short excerpt (for WordPress post summary)

A clear, practical step-by-step guide to registering for global certifications (ISO, CE, HACCP and more). Covers documents, timelines, costs, common mistakes and actionable tips to get certified faster.

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Disclaimer (add to end of post or in site footer)

Disclaimer: The information provided in this article is intended for general guidance only and does not constitute legal, regulatory, or professional advice. Certification requirements, timelines, and fees can vary by country, accreditation body, and industry. Saving Mantra makes no warranty about the completeness, reliability, or suitability of the information. For advice specific to your organization and jurisdiction, please consult an accredited certification body or qualified consultant.

Step 1: Obtain DSC & DIN for Proposed Directors

The new company (post-conversion) must have:

• Minimum 2 Directors
• DSC (Digital Signature Certificate)
• DIN (Director Identification Number)

If LLP partners do not have DIN, they must apply.

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✔ Step 2: Reserve the New Name Using RUN

Apply for name reservation through the RUN (Reserve Unique Name) service on MCA portal.

Name guidelines:

• Must include “Private Limited” at the end
• Should not violate trademark rules
• LLP name can be retained if available

After approval, you get a Name Reservation Letter.

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✔ Step 3: Publish Newspaper Advertisement (Mandatory)

As per Section 366, the LLP must publish a notice of conversion in:

• 1 English newspaper
• 1 Vernacular (local language) newspaper

This informs the public about the conversion proposal.

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✔ Step 4: Prepare Required Declarations & Affidavits

The LLP must prepare:

• List of proposed directors/shareholders
• Statement of Assets and Liabilities
• Consent of all partners
• Declaration stating no objection to conversion
• Undertaking that all liabilities are fully disclosed

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✔ Step 5: File URC-1 for Conversion Approval

Form URC-1 (Companies Authorized to Register) must be filed with MCA.

Attachments include:

• Statement of assets & liabilities
• LLP Registration Certificate
• Newspaper advertisement copy
• List of partners & proposed directors
• Consent letters
• MOA & AOA draft
• Utility bill of office
• NOC from property owner

URC-1 is the core step for conversion approval.

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✔ Step 6: File SPICe+ (INC-32) for Incorporation

After URC-1 approval, file SPICe+, which includes:

• INC-33 (e-MOA)
• INC-34 (e-AOA)
• AGILE-PRO (for GST, EPFO, ESIC, Bank Account, Shops Act, etc.)

This officially registers the new Private Limited Company.

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✔ Step 7: Issue Certificate of Incorporation

Once MCA approves SPICe+, you will receive a Certificate of Incorporation (COI) with:

• New Company Name
• CIN (Corporate Identification Number)
• Date of incorporation

This marks the completion of the conversion.

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✔ Step 8: Transfer Assets, Liabilities & Bank Accounts

Post-incorporation:

• Transfer all assets & liabilities from LLP to the new company
• Update bank accounts
• Update GST, MSME, Shops Act, and other registrations
• Inform vendors, customers, and stakeholders

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Benefits of Converting LLP Into Private Limited Company

• Better access to funding from investors
• Limited liability + structured shareholding
• Higher credibility with banks and customers
• Easy transfer of ownership
• Ability to issue shares and raise equity
• Eligible for startup investors (Angel, VC, PE)

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Common Mistakes to Avoid

• Not publishing newspaper advertisement
• Incorrect documents in URC-1
• Not obtaining partner consent
• Not updating GST or bank accounts
• Using LLP name in invoices after conversion

SavingMantra recommends verifying all documents before filing.

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Frequently Asked Questions (FAQ)

1. Can all LLP partners become directors in the new company?

Yes, they can become both shareholders and directors.

2. Will PAN change after conversion?

Yes, the new Pvt Ltd Company gets a new PAN.

3. Is GST migration automatic?

No, GST must be updated or re-registered using the new company PAN.

4. Is LLP dissolved after conversion?

Yes, after conversion approval, the LLP ceases to exist as a separate entity.

5. How long does conversion take?

Typically 20–40 days, depending on MCA processing.

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Conclusion

Converting an LLP into a Private Limited Company is an excellent decision for businesses looking to scale, raise investments, or enhance corporate credibility. With the right documentation and compliance steps, the process is smooth and beneficial.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Dissolve or Transfer Existing Proprietorship

A proprietorship cannot be ‘converted’ directly, but its business can be transferred to a partnership by:

• Creating a new partnership firm
• Transferring assets, liabilities, goodwill, licenses, and business operations

A declaration is usually prepared explaining the transfer.

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✔ Step 2: Decide the Partnership Structure

Important decisions include:

• Who will be the partners
• Percentage of capital contribution
• Profit-sharing ratio
• Rights & duties of each partner
• Name and business activity of the new partnership

The name can remain the same as the proprietorship (if available).

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✔ Step 3: Draft the Partnership Deed

The Partnership Deed is the most important document. It must include:

• Firm name
• Business nature
• Capital introduced by partners
• Profit-sharing ratio
• Roles & responsibilities
• Banking provisions
• Rules for admission or exit of partners
• Signature of all partners

Get it printed on stamp paper and notarised.

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✔ Step 4: Register the Partnership Firm (Optional but Recommended)

Though not mandatory, registering a partnership provides legal protection.

Apply with:

• Partnership deed
• Application form
• Address proof
• ID proof of partners
• Stamp duty receipt

After approval, you receive a Certificate of Registration from the Registrar of Firms.

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✔ Step 5: Apply for New PAN of the Partnership

A partnership firm needs its own:

• PAN Card
• Optional: TAN number for TDS

This marks the new legal identity of the business.

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✔ Step 6: Update GST Registration (If Applicable)

If the proprietorship had GST:

Two options:

1. Surrender the Proprietorship GST and apply for a new GST in the name of the partnership firm, or
2. Apply for amendment in GST to add new partners, change business structure, and update PAN (requires cancellation & new registration because PAN changes).

PAN change = New GST registration mandatory.

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✔ Step 7: Update Bank Account

Process:

• Close or convert the old proprietorship account
• Open a new bank account for the partnership
• Submit:
  • Partnership Deed
  • PAN of partnership
  • Address proof
  • Registration Certificate (if applicable)

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✔ Step 8: Transfer Assets & Licenses to Partnership

Transfer:

• Inventory
• Fixed assets
• Contracts
• Licenses (Shop Act, FSSAI, MSME, etc.)
• Employees
• Digital assets

Update Udyam/MSME, Shop Act, and other registrations as per partnership details.

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✔ Step 9: Start Operating as a Partnership Firm

Once all registrations and bank accounts are updated, the firm can legally start business operations.

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Benefits of Converting to a Partnership

• More hands to manage business
• Increased capital availability
• Risk shared among partners
• Better decision-making
• Higher credibility with banks & vendors
• Tax benefits on business expenditure

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Common Mistakes to Avoid

• Not drafting a detailed partnership deed
• Not transferring old liabilities correctly
• Using the same bank account of proprietorship
• Continuing invoices in old name after conversion
• Not updating GST or other licenses

SavingMantra recommends a full compliance check before conversion.

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Frequently Asked Questions (FAQ)

1. Can the business name remain the same after conversion?

Yes, if the name is not already taken by another entity.

2. Does GST need new registration?

Yes, because GST is PAN-based and partnership has a different PAN.

3. Can employees remain under the new partnership?

Yes, employees can be transferred along with the business.

4. Is partnership registration mandatory?

No, but it is highly recommended to avoid legal disputes.

5. Can a proprietor become a partner in the new firm?

Yes, the existing proprietor often becomes one of the partners.

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Conclusion

Converting a proprietorship into a partnership is a strategic decision that provides more flexibility, shared responsibilities, and better opportunities for business expansion. With proper documentation and compliance, the transition can be smooth and legally sound.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

execution.

Step 1: Hold a Board Meeting

The Board must:

• Approve proposal for name change
• Authorize a director/company secretary
• Call an Extraordinary General Meeting (EGM)

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✔ Step 2: Reserve the New Name (RUN / SPICe+ Part A)

Apply for name reservation through:

• RUN (Reserve Unique Name), or
• SPICe+ Part A

After approval, MCA will issue a Name Approval Letter.

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✔ Step 3: Conduct the EGM & Pass Special Resolution

At the Extraordinary General Meeting (EGM):

• Explain the reason for name change
• Members must pass a special resolution (75% majority)
• Approve alteration of MOA & AOA

Maintain proper minutes and attendance records.

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✔ Step 4: File MGT-14 with MCA

Within 30 days of passing the special resolution, file MGT-14, attaching:

• Special Resolution
• Explanatory Statement
• EGM Notice
• Altered MOA & AOA

This step is mandatory before INC-24.

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✔ Step 5: Download & Fill INC-24 Form

Go to:
MCA Portal → MCA Services → E-Forms → Download INC-24

Fill in:

• CIN and Company details
• Reason for name change
• Details of resolutions passed
• New name approved by MCA
• SRN of RUN / SPICe+ name reservation
• SRN of MGT-14

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✔ Step 6: Attach Required Documents

Attach:

• Certified copy of Special Resolution
• EGM Notice
• Altered MOA & AOA
• Name Reservation Letter
• Optional supporting documents

Ensure documents are clear and in PDF format.

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✔ Step 7: Sign the Form with DSC

INC-24 must be digitally signed by:

• Director or Company Secretary (CS)
• Certified by a Practicing CA/CS/CMA

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✔ Step 8: Upload INC-24 to MCA Portal

Navigate to:
MCA Services → Upload E-Forms

Upload the form and pay applicable filing fees.
Once submitted, you will receive an SRN for tracking.

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✔ Step 9: Track Status & Receive Certificate of Name Change

Use Track SRN Status to monitor progress.

After approval, MCA will issue the Certificate of Incorporation (COI) with the new name, which is the final legal proof of name change.

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Timeline for the Entire Process

Step	Approx Time
Name Reservation	1–3 days
Conducting EGM	7–21 days
Filing MGT-14	Within 30 days
Filing INC-24	After MGT-14
MCA Approval	3–10 working days

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Fees for Filing INC-24

Filing fees depend on the company’s authorized share capital, as per MCA fee schedule.

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Common Mistakes to Avoid

• Incorrect SRN of RUN or MGT-14
• Not altering MOA/AOA properly
• Typographical errors in name or CIN
• Missing attachments
• DSC not registered on MCA portal

SavingMantra recommends reviewing the RUN approval letter carefully.

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Frequently Asked Questions (FAQ)

1. Can a company change its name without EGM?

No. A special resolution from shareholders is mandatory.

2. Does MCA always approve the new name?

Approval depends on:

• Availability of name
• No resemblance to existing trademarks/companies
• Compliance with naming guidelines

3. How long does it take to get a new Certificate of Incorporation?

Generally 3–10 working days after INC-24 approval.

4. Are LLPs required to file INC-24?

No, LLPs have a different process for name change.

5. What happens after name change approval?

Company must:

• Update PAN, GST, Letterheads, Bank A/c
• Update contracts & licenses
• Inform stakeholders

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Conclusion

Filing INC-24 is an essential compliance requirement for companies seeking to change their names legally. With proper documentation, resolutions, and timely filings, the process becomes smooth and hassle-free.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Visit MCA Portal and Download CHG-1

Go to: https://www.mca.gov.in
Navigate to:
MCA Services → E-Forms → Download E-forms
Search for CHG-1 and download the latest version.

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✔ Step 2: Enter Basic Company Details

Fill in the details such as:

• Corporate Identification Number (CIN)
• Company Name (auto-populates)
• Registered Office Address
• Email ID of the company

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✔ Step 3: Select Purpose of the Form

Choose one of the following:

• Creation of Charge
• Modification of Charge
• Additional Security

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✔ Step 4: Enter Lender (Charge Holder) Details

Provide details of the lender:

• Name of bank / financial institution
• Address
• Contact information
• Category of charge holder

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✔ Step 5: Provide Charge Details

Enter the financial details:

• Amount secured by the charge
• Date of charge creation / modification
• Nature of charge (mortgage, hypothecation, etc.)
• Brief description of assets charged
• Terms of repayment

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✔ Step 6: Attach Required Documents

Upload:

• Loan agreement
• Instrument of charge
• Sanction letter
• Property details
• Board resolution

Make sure attachments are in PDF format and clear.

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✔ Step 7: Sign the Form with Digital Signature

The form must be digitally signed by:

• Director / Manager / CEO / CFO
• Charge Holder (bank), in certain cases

If necessary, a practicing CA/CS/CMA may need to certify the form.

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✔ Step 8: Upload CHG-1 to MCA Portal

Go to:
MCA Services → Upload E-Forms

Upload the digitally signed form.
Pay the applicable filing fee based on the company’s authorized capital.

Once submitted, you will receive an SRN (Service Request Number) for tracking.

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✔ Step 9: Track Filing Status

Go to:
MCA → Track SRN Status

Check if:

• Approved
• Pending for processing
• Sent for resubmission

Once approved, the ROC issues a Certificate of Registration of Charge (Form CHG-2).

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Advantages of Filing CHG-1 on Time

• Ensures legal recognition of the lender’s security
• Helps maintain transparent financial records
• Avoids heavy penalties and condonation procedures
• Helps companies secure loans easily in the future

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Penalties for Late Filing

If CHG-1 is not filed within 30 days:

• Additional fees apply for delayed filing
• ROC may require condonation of delay
• Charge may become void against the lender
• Directors may be held liable for non-compliance

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Common Mistakes to Avoid

• Incorrect charge amount
• Missing attachments
• Wrong CIN entry
• DSC token not registered
• Not coordinating with lender for documentation

SavingMantra recommends verifying all documents before form submission.

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Frequently Asked Questions (FAQ)

1. What is the purpose of filing CHG-1?

To legally register a charge created on a company’s assets.

2. Can CHG-1 be filed without lender documents?

No, loan agreement and charge instrument are mandatory.

3. What if CHG-1 is not filed within 300 days?

A condonation application must be made to the Central Government.

4. Who signs the CHG-1 form?

Director/Manager and sometimes the charge holder (bank).

5. Is modification of charge also filed through CHG-1?

Yes, CHG-1 is used for both creation and modification of charges.

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Conclusion

Filing CHG-1 is a crucial legal requirement for companies that create or modify charges on their assets. Accurate and timely filing ensures that the company stays compliant and that the lender’s security is legally protected.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Visit the MCA Portal

Go to: https://www.mca.gov.in
Navigate to:
MCA Services → E-Forms → Download Forms
Search for MSC-3 and download the latest version.

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✔ Step 2: Enter Company Details

Fill the basic details:

• CIN
• Company Name
• Registered Office Address
• Financial year for which return is filed

Most details auto-populate after CIN entry.

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✔ Step 3: Provide Dormant Status Information

Enter:

• Date of approval from MCA (MSC-2)
• SRN of MSC-2
• Reason for continuing dormant status

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✔ Step 4: Declare Absence of Financial Transactions

This is the most important part.

The company must declare that:

• It has not carried out any business activities
• No significant financial transactions have occurred
  as per section 455(1) of the Companies Act.

Significant transactions include:

• Borrowings
• Payments over ₹5,000
• Asset purchases

If any such transaction occurred, dormant status may be withdrawn.

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✔ Step 5: Attach Required Documents

Common attachments include:

• Director’s declaration
• Financial statements (if required)
• List of directors & shareholders
• Proof of no significant transactions
• Optional attachments (supporting documents)

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✔ Step 6: Affix Digital Signature (DSC)

The form must be digitally signed by:

• A Director (authorized), and
• Optional: Practicing CA/CS/CMA Certification, depending on requirements

Ensure your DSC token and drivers are properly installed.

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✔ Step 7: Upload the Form on the MCA Portal

Go to:
MCA Services → Upload E-Forms

Upload MSC-3 and pay the applicable filing fees.

Once submitted, the system will generate an SRN as acknowledgment.

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✔ Step 8: Track Filing Status

Go to Track SRN Status on the MCA portal to verify:

• Approval
• Pending for processing
• Resubmission required

After approval, the company continues to hold dormant status.

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⚠ Penalties for Not Filing MSC-3

Failure to file MSC-3 can result in:

• Dormant status cancellation
• Company may be treated as an active non-compliant company
• Directors may face penalties
• Additional fees for delayed filing

Regular filing ensures that dormant status remains valid.

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Benefits of Maintaining Dormant Status

• No risk of business closure
• Reduced compliance burden
• No requirement for active operations
• Ideal for startups holding intellectual property
• Helps preserve company name for future business

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Common Mistakes to Avoid

• Incorrect CIN or financial year
• Failing to provide MSC-2 date
• Missing attachments
• DSC not registered on MCA portal
• Declaring false information (can lead to penalties)

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Frequently Asked Questions (FAQ)

1. Who is required to file MSC-3?

Every company that has obtained dormant status through MSC-2.

2. What is the due date for MSC-3?

Within 30 days after the end of every financial year.

3. Is there any filing fee?

Fees vary based on authorized share capital.

4. What happens if a company becomes active again?

It must apply for active status via MSC-4.

5. Can a dormant company perform any financial transaction?

No significant financial activity is allowed.

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Conclusion

Filing MSC-3 is essential for companies wishing to maintain their dormant status legally. The process is simple when handled correctly, and timely filing helps avoid compliance issues, penalties, and cancellation of dormant status.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

Step 1: Hold a Board Meeting

The Board of Directors must convene a meeting to:

• Approve alteration of the object clause
• Fix date, time & venue for the EGM
• Approve draft of the revised MOA
• Authorize a director/company secretary to issue notices

A Board Resolution is passed accordingly.

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✔ Step 2: Issue Notice for Extraordinary General Meeting (EGM)

A notice of the EGM must be sent to:

• All shareholders
• Directors
• Auditors

The notice must include:

• Explanatory statement
• Draft altered MOA
• Reason for changing object clause

The notice must be sent at least 21 clear days before the EGM unless shorter notice is consented.

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✔ Step 3: Conduct the EGM and Pass a Special Resolution

At the EGM, shareholders vote on the proposed alteration.
A Special Resolution, requiring 75% majority, must be passed to approve the new object clause.

Minutes of the meeting should be recorded.

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✔ Step 4: File MGT-14 with MCA

Within 30 days of passing the Special Resolution, the company must file Form MGT-14 on the MCA portal.

Upload:

• Certified copy of Special Resolution
• Notice of EGM
• Explanatory statement
• Altered MOA
• Optional attachments

This legally informs the government about the change.

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✔ Step 5: Update the MOA with the New Object Clause

Once MGT-14 is successfully approved, the company’s MOA must be updated to include the new object clause.

This updated MOA becomes the official governing document.

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✔ Step 6: Notify Stakeholders & Update Internal Records

After approval, the company should:

• Update internal registers
• Inform bankers, investors, and stakeholders if relevant
• Modify business registrations (if required)
• Update website and legal documents

This ensures full transparency in company operations.

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Why the Change in Object Clause Is Important

• Ensures legal compliance under Companies Act
• Enables business expansion
• Prevents penalties for activities outside MOA
• Strengthens corporate governance
• Helps attract investors with clear vision

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Timeline for the Process

Step	Time Required
Board Meeting	1 day
EGM Notice	21 days (or shorter notice)
EGM & Resolution	1 day
Filing MGT-14	Within 30 days
MCA Approval	3–7 working days

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Penalties for Non-Compliance

If a company performs activities outside its object clause without alteration:

• MCA can impose penalties
• Contracts may be considered ultra vires (beyond authority)
• Directors may be held liable

Proper alteration is legally mandatory.

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Frequently Asked Questions (FAQ)

1. Is MCA approval mandatory for changing the object clause?

Yes. The change becomes valid only after MCA validates the MGT-14 filing.

2. Do all shareholders need to approve the change?

A special resolution (75% approval) is required.

3. Can a Private Limited Company add multiple new business activities?

Yes, multiple activities can be added in the object clause.

4. What is the government fee for MGT-14?

Fees vary based on the company’s authorized capital.

5. Can a company change its object clause anytime?

Yes, provided the prescribed procedure is followed.

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Conclusion

Changing the object clause is essential for companies looking to diversify, grow, or restructure their business operations. Following the correct procedure ensures compliance and smooth approval.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances.

All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.