Employee Stock Option Plans (ESOPs) are powerful tools to attract, motivate and retain talent by giving employees the right to buy company shares at a preset price after a vesting period. ESOPs also align employee incentives with long-term company growth, but they carry specific legal, tax and disclosure obligations in India. This guide walks you through an end-to-end, compliance-first ESOP rollout process: from policy drafting to exercise, allotment and statutory filings.

---

1) Decide objectives & ESOP design (policy fundamentals)

Start with clear objectives: retention, reward, leadership pipeline, or founder dilution management. Key design parameters to define:

• Pool size (e.g., 5–15% of equity)
• Grantees (employees, directors, consultants — who qualifies)
• Vesting schedule (cliff + monthly/quarterly vesting)
• Exercise price (fixed / FMV / formula)
• Exercise window and post-termination treatment (accelerated vesting, buyback, forfeiture)
• Type of instrument (option leading to equity on exercise; RSU/ESPP differences)
• Performance vs time-based vesting

Document these in an ESOP Policy / Scheme Document (operational rules and definitions). This acts as the single source of truth for grants and disputes.

---

2) Check corporate powers & Articles of Association (AoA)

Confirm the company’s AoA allows issuance of shares / options. If not, amend AoA before approving the ESOP. ESOP issuance is governed under Section 62(1)(b) of the Companies Act, 2013 and related Rules — the scheme must be authorized by the company’s constitutional documents. ICSI

---

3) Board approval and draft scheme

• Convene a Board meeting to approve: draft ESOP scheme, pool size, grant policy, key dates (grant/vesting/exercise) and to call an EGM (if shareholder approval is required).
• Approve the grant letter template, employee communications, and appoint an ESOP administrator (company secretary/HR/legal).
  Keep minutes and a certified copy of the Board resolution on the record.

---

4) Shareholder approval (special resolution) & MGT-14 filing

• Private companies: In practice, ESOP schemes require shareholders’ approval by special resolution (check Rule 12 and any relevant MCA notifications); hold an EGM and pass the special resolution with an explanatory statement setting out scheme details (number of options, class of employees, pricing, vesting, etc.). ICSI
• File Form MGT-14 with the RoC within 30 days of passing the special resolution (attach the scheme, certified copy of resolution and explanatory statement). cleartax

Practical tip: loop in investors early — ESOP pool size is often negotiated in funding rounds.

---

5) Register setup & internal records

Maintain statutory and internal registers required for ESOPs:

• Register of Employee Stock Options (Form SH-6 style tracking — maintain details of grants, vesting, exercises, cancellations)
• Cap table updates (grant pool should be visible as reserved equity)
• Individual grant letters and signed employee consent forms.

Many companies also use a digital equity management platform to track vesting schedules, exercises and generate tax reports.

---

6) Granting options (Grant Letter & communication)

Issue Grant Letters to grantees containing:

• Number of options granted
• Grant date & vesting commencement date
• Vesting schedule & cliff, exercise price, exercise period
• Termination / resignation / misconduct clauses
• Lock-in, transfer restrictions and right of first refusal (if applicable)

Obtain signed acceptance from each grantee and keep copies in employee files.

---

7) Vesting & exercise process

• Vesting: Options vest as per schedule; employees do not have shareholder rights until they exercise and shares are allotted.
• Exercise: Employee submits an exercise notice and pays the exercise price. The Board passes a resolution approving allotment of shares on exercise.

---

8) Allotment & RoC filing — PAS-3 (Return of Allotment)

After allotment on exercise, the company must file Form PAS-3 (Return of Allotment) with RoC within the statutory time (private placement/allotment timelines differ; often within 15–30 days depending on nature of allotment). Accurate list of allottees and certified board resolution must be attached. Timely PAS-3 filing preserves legal validity and avoids late fees. Fiscal Flow Website+1

---

9) Taxation & TDS considerations

ESOPs generally create two tax events for employees:

1. Perquisite tax at exercise (or allotment) — the difference between fair market value (FMV) and exercise price is treated as a perquisite and is taxable as salary in the hands of the employee (employer must compute value and withhold TDS where applicable). For eligible start-ups, specific reliefs and deferments may apply under notified rules — confirm current Income-tax guidance and eligibility rules. Income Tax India+1
2. Capital gains on sale — when employee sells shares, capital gains tax applies (short-term/long-term rules depend on holding period and whether shares are listed or unlisted).

Also check recent clarifications on cross-border ESOPs (GST/GST Council clarifications), and TDS reporting rules where ESOPs are provided through overseas holding companies. Goods and Services Tax Council

Practical: Maintain perquisite calculation worksheets and issue Form 16/TDS statements correctly; consult tax advisors for any start-up deferment schemes.

---

10) Listed companies & SEBI disclosure rules

Listed companies face additional disclosure and procedural requirements under SEBI regulations for share-based benefits — including detailed disclosures in board/ESOP committee reports and limits on grants to promoters/major shareholders. Ensure compliance with SEBI guidelines for listed entities. SEBI Investor

---

11) Ongoing compliance & governance

• Update statutory registers and minute books.
• Disclose aggregate ESOP movements in board reports and director’s report (per accounting and regulatory requirements).
• Monitor insider trading blackout periods and share transfer restrictions for employees.
• Re-approve or top-up ESOP pools when required and file MGT-14 each time a new special resolution is passed. Ebizfiling

---

12) Common pitfalls & compliance risks

• Not obtaining/filing shareholder approval where required (or failing to attach explanatory statement). ICSI
• Missing PAS-3 filing after allotment (late fees / legal risk). Fiscal Flow Website
• Incorrect perquisite calculations, incorrect TDS or late TDS deposit. Income Tax India
• Granting options to disallowed persons (e.g., some restrictions on promoters / large shareholders for listed companies). Reuters

---

ESOP implementation checklist (copy-paste)

1. Draft ESOP Policy & Scheme (include pool size, vesting & exercise rules).
2. Verify AoA; prepare AoA amendment if required.
3. Board resolution to approve ESOP draft and call EGM (if needed).
4. Prepare explanatory statement and hold EGM — pass special resolution.
5. File MGT-14 within 30 days. cleartax
6. Issue Grant Letters; collect signed acceptance.
7. Maintain ESOP register and update cap table.
8. Track vesting; accept exercise notices and pass allotment resolution.
9. File PAS-3 within prescribed period after allotment. Fiscal Flow Website
10. Compute perquisite value; deduct and deposit TDS as required. Income Tax India
11. Disclose ESOP movements in statutory reports; maintain records for audits.

---

Quick timelines (typical)

• Board approval → within days (depending on calendar)
• Shareholder approval (EGM) → allow 21 days notice + meeting scheduling
• MGT-14 filing → within 30 days of passing resolution. cleartax
• PAS-3 allotment filing → within 15–30 days of allotment (depending on private placement/public allotment rules). Fiscal Flow Website

---

Conclusion

An ESOP is a strategic instrument — when designed and executed properly it drives ownership culture and retention. But ESOPs also bring a web of corporate, tax and securities rules that must be respected. Follow a structured process: design the policy, secure board and shareholder approvals, maintain statutory registers, handle vesting/exercise formalities carefully, file required RoC forms on time and treat tax/TDS obligations as a first-class part of the process.

Saving Mantra can help you with ESOP policy drafting, board/EGM pack preparation, MGT-14 & PAS-3 filings, tax computation templates, and continuous compliance dashboards to automate reminders and reports.

---

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.

A Director Identification Number (DIN) is a unique 8-digit identifier issued by the Ministry of Corporate Affairs (MCA) to any individual who wishes to become a director in an Indian company.
DIN is mandatory for:

• Appointment as a Director in any company
• Filing returns, forms, or documents under the Companies Act
• Acting as a director in one or multiple companies

This Saving Mantra guide explains the complete DIN registration process, eligibility, required documents, and compliance responsibilities.

---

1. What is DIN and Why Is It Required?

DIN is a permanent number assigned to a person who intends to act as a director. Once issued:

• It never expires
• It stays linked to the individual, even if they change companies
• It ensures transparency and traceability in corporate governance

DIN enables authorities to track a director’s involvement across various companies.

---

2. Eligibility Criteria for Obtaining DIN

An individual must:

• Be at least 18 years old
• Be legally competent
• Not be disqualified under the Companies Act
• Provide valid identity and address proof
• Hold a valid Digital Signature Certificate (DSC) (mandatory for e-filing)

Foreign nationals may also apply for DIN with notarized and apostilled documents.

---

3. Step-by-Step Process for Obtaining DIN

Step 1: Obtain Digital Signature Certificate (DSC)

A DSC is required to sign the DIN application electronically.
The applicant must submit:

• PAN (mandatory for Indian citizens)
• Address proof
• Photograph
• Email and mobile verification

Once issued, the DSC is mapped to the applicant’s name.

---

Step 2: Prepare DIN Application (Form DIR-3)

DIN is applied using Form DIR-3, unless the applicant is a proposed director in a new company (then DIN is allotted through SPICe+ form during incorporation).

In DIR-3, the applicant must enter:

• Full name
• Father’s name
• Date of birth
• Address
• Identity details
• Declaration of non-disqualification

---

Step 3: Attach Required Documents to DIR-3

Essential attachments include:

• Identity proof (PAN mandatory for Indians; Passport for foreign nationals)
• Address proof (Aadhaar, driving license, voter ID, utility bill)
• Latest photograph
• Declaration signed by the applicant
• Board Resolution proposing the appointment (if applicable)

All documents must be self-attested. Foreign nationals must notarize and apostille.

---

Step 4: Certification by a Professional

DIR-3 must be digitally certified by a:

• Company Secretary (CS)
• Chartered Accountant (CA)
• Cost Accountant (CMA)

They verify the identity and authenticity of the applicant.

---

Step 5: Upload DIR-3 on MCA Portal

After preparing the form:

• Log in to the MCA portal
• Upload the DIR-3 form
• Pay the applicable government fee

Once filed successfully, an SRN (Service Request Number) is generated for tracking.

---

Step 6: MCA Verification & Allotment of DIN

MCA examines the application.
If all details match and documents are clear:

• DIN is allotted within 1–3 working days
• The applicant receives an email confirmation
• The DIN becomes active immediately

If there are discrepancies, MCA may send a resubmission requirement.

---

4. Documents Required for DIN Application

For Indian Nationals

• PAN Card (mandatory)
• Aadhar / Passport / Voter ID / Driving License
• Latest utility bill or bank statement (address proof)
• Passport-size photograph

For Foreign Nationals

• Passport (mandatory)
• Address proof (must be notarized & apostilled)
• Photograph

Additional Documents

• Declaration by the applicant
• Board Resolution (if applying via DIR-3)

---

5. DIN Allotment Timelines

Task	Time
DSC issuance	1 day
DIR-3 preparation	1 day
MCA approval	1–3 days

Total estimated time: 3–5 working days

---

6. Post-DIN Compliance Responsibilities

Once DIN is allotted, the director must:

• Use DIN for all MCA filings
• Notify changes in personal details (using DIR-6)
• Update KYC every year through DIR-3 KYC
• Retain login and DIN documents securely

Failure to complete annual DIN KYC leads to deactivation.

---

7. Common Reasons for DIN Application Rejection

• Mismatch of name with PAN
• Blurry or incomplete documents
• No DSC or expired DSC
• Incorrect birthdate or address
• Missing professional certification
• Improper/notarized documents for foreign nationals

Saving Mantra ensures all documents meet MCA standards to avoid resubmissions.

---

Conclusion

Obtaining a DIN is the first and most essential step toward becoming a director in India. By following the correct documentation process, validating identity details, and completing MCA filings accurately, the DIN can be obtained quickly and efficiently.

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.

A Designated Partner plays a crucial statutory role in a Limited Liability Partnership (LLP). They are responsible for ensuring compliance, signing annual filings, maintaining books of accounts, and representing the LLP before the Registrar.
Under the LLP Act, every LLP must have at least two Designated Partners, and at least one must be a resident of India.

This Saving Mantra guide explains the end-to-end appointment process, required documentation, MCA filing steps, and compliance rules.

---

1. Understanding Who Can Be a Designated Partner

An individual is eligible to become a Designated Partner if they:

• Are at least 18 years old
• Are not disqualified under the LLP Act
• Possess a valid Digital Signature Certificate (DSC)
• Possess a Designated Partner Identification Number (DPIN) or apply for one
• Provide consent to act as a designated partner

Unlike companies, LLPs do not require DIN; they require DPIN, which is generated through MCA filings.

---

2. Step-by-Step Process for Appointment of a Designated Partner

Step 1: Obtain Digital Signature Certificate (DSC)

A DSC is mandatory for signing LLP forms.
If the incoming partner does not have one, it must be procured first through a licensed certifying authority.

---

Step 2: Apply for DPIN (if not available)

If the partner does not already have a Designated Partner Identification Number:

• File DIR-3 (if applicable) or apply during incorporation/other filings.
• Attach ID proof, address proof, photograph, and DSC.

Once approved, MCA issues a unique DPIN.

---

Step 3: Obtain Consent to Act as a Designated Partner

The incoming partner must provide:

• Consent Letter to act as a Designated Partner
• Declaration of non-disqualification under the LLP Act
• KYC documents (PAN, Aadhaar, address proof)

The LLP should maintain these documents in its statutory records.

---

Step 4: Execute Supplementary LLP Agreement

To officially include the new partner and their profit-sharing ratio, a Supplementary LLP Agreement must be drafted and executed.

Key updates include:

• Name of new designated partner
• Rights and duties
• Contribution details
• Updated profit-sharing ratio

The agreement must be executed on non-judicial stamp paper as per state stamp laws.

---

Step 5: File Form LLP-3 for Agreement Changes

File Form LLP-3 on the MCA portal to submit the updated LLP Agreement.

Attach:

• Supplementary LLP Agreement (PDF)
• Resolution/Consent of Partners
• Any other supporting documents

---

Step 6: File Form LLP-4 (Notice of Appointment)

This is the main statutory filing for appointment.

Form LLP-4 includes:

• DPIN of the incoming designated partner
• Date of appointment
• Consent letter
• Personal KYC details

After submission and approval, the partner is officially recorded as a Designated Partner in the MCA database.

---

3. Documents Required

For the Designated Partner

• PAN Card
• Aadhaar / Passport / Voter ID
• Latest address proof (utility bill or bank statement — not older than 2 months)
• Passport-size photo
• DSC
• Consent letter to act as a designated partner
• Declaration of eligibility

For the LLP

• Board / Partner Resolution
• Supplementary LLP Agreement
• Updated partner list
• Registered office documents (if required)

---

4. Timeline Summary

Step	Approx. Time
DSC procurement	1 day
DPIN approval	1–2 days
Drafting & signing Supplementary Agreement	1 day
Filing LLP-3 & LLP-4	1 day
MCA approval	2–3 days

Total estimated time: 4–7 working days.

---

5. Responsibilities of a Designated Partner

Once appointed, the designated partner must:

• Ensure timely annual filings (Form 8 & Form 11)
• Maintain books of accounts
• Represent the LLP legally
• Manage compliance and statutory registers
• Ensure changes in LLP are filed within deadlines
• Cooperate in audits and regulatory inspections

---

6. Practical Tips from Saving Mantra

• Always verify DPIN details before filing LLP-4 to avoid rejection.
• Ensure the DSC of the new partner is active and mapped to their DPIN.
• Draft a clear Supplementary Agreement outlining roles and contribution.
• Keep proper internal records for audit and legal verification.
• For multiple appointments, sequence LLP-3 and LLP-4 filings correctly.

---

Conclusion

The appointment of a Designated Partner is a legally significant step and must be completed with accurate documentation and timely MCA filings. A structured workflow ensures compliance and protects the LLP from penalties or delays.

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.

Form INC-20A is the statutory declaration that directors file with the Registrar of Companies (RoC) to confirm that a newly incorporated company (with share capital) has received its subscription money and is ready to commence business. This guide gives a concise, practical, step-by-step workflow, the documents you must attach, timings, common errors, and a ready checklist you can copy into your compliance tracker. TaxGuru+1

---

Who must file INC-20A and when

• Applicability: Any company incorporated on or after 2 November 2018 which has share capital must file Form INC-20A before commencing business. TaxGuru+1
• Deadline: File within 180 days from the date of incorporation. Failure to file within this period attracts penalties and may lead to director-level penalties or other actions by the RoC. cleartax+1

---

Quick overview — Why INC-20A?

Filing INC-20A confirms two primary things to the RoC:

1. Every subscriber to the Memorandum has paid the value of the shares agreed to be taken by them.
2. The company is ready to commence business / exercise borrowing powers (subject to sectoral approvals if applicable). Indian Kanoon+1

---

Step-by-step filing process

1. Board meeting & resolution

• Convene a Board meeting to approve the declaration that the company is ready to commence business.
• Record and pass a resolution authorizing a director to sign and file Form INC-20A.
• If the company’s object requires sectoral approvals (RBI/SEBI/IRDA etc.), the resolution should confirm that approvals have been obtained or are in place. India Filings

2. Collect evidence of subscription money receipt

• Obtain a bank statement / bank certificate showing the receipt of subscription money from each subscriber mentioned in the MoA. The bank evidence must clearly link the amounts to the company’s account and subscriber names. India Filings

3. Prepare director declarations & affidavits

• Directors prepare the statutory declaration under Section 10A (included in INC-20A).
• Obtain the director’s declaration that the statements in the form are true. The contents of INC-20A must be certified/verified by a practicing CA / CS / CMA. Indian Kanoon+1

4. Attach required documents

Common attachments (attach scanned PDFs when uploading) include:

• Bank statement / bank certificate evidencing subscription amount.
• Copy of the Board resolution authorizing filing.
• Proof of registered office (if applicable).
• Copies of sectoral regulatory approvals (if the company’s objects require them).
• Certification by practicing CA/CS/CMA (certificate of verification). India Filings+1

5. Fill INC-20A on MCA portal (MCA 3.0 / as applicable)

• Login to MCA, select e-form INC-20A.
• Enter company CIN, incorporation date, director details, bank proof details and attach the scanned documents.
• Sign the form using the Digital Signature Certificate (DSC) of the filing director (or authorized signatory). The practicing professional’s certificate must also be attached. Setindiabiz

6. Submit & pay fees (if applicable)

• Submit the form and pay any filing fees. The form will be processed by the RoC. Keep the SRN / acknowledgement for records.

7. Maintain records

• Store all attachments, the filing acknowledgement and the board minutes in the statutory records. INC-20A evidence is frequently requested during audits or regulator reviews. India Filings

---

Timeline & penalties — be strict on deadlines

• When to file: Within 180 days of incorporation. cleartax
• Consequences of non-filing: Penalties on the company and every officer in default; in severe cases, RoC may initiate strike-off or other action. Recent regulatory actions show significant penalties where INC-20A was not filed timely. IndiaFilings+1

---

Common mistakes to avoid

• Relying on memoranda without a proper bank statement showing subscriber payments. India Filings
• Forgetting certification by a practicing CA/CS/CMA — INC-20A requires professional verification. Indian Kanoon
• Uploading poor-quality scans that obscure bank references or dates.
• Filing after 180 days — late filing attracts penalties and can trigger further compliance scrutiny. IndiaFilings
• Not attaching sectoral approvals where required (RBI/SEBI/other licences).

---

Practical checklist (copy-paste into your compliance tracker)

1. Board resolution authorizing INC-20A filing — signed and dated.
2. Bank statement / bank certificate with subscriber receipts (PDF).
3. Director’s declaration (signed).
4. Professional verification certificate (CA/CS/CMA) — signed & stamped.
5. Sectoral approvals (if applicable).
6. DSC of filing director / authorized signatory.
7. Upload INC-20A on MCA + pay fees.
8. Save SRN / acknowledgement; file in statutory records.

---

Use cases where INC-20A is not required

• Companies incorporated before 2 November 2018.
• Companies without share capital (e.g., Section 8 companies without share capital). TaxGuru

---

Conclusion

Form INC-20A is a short form but a high-impact compliance — it’s the formal gatekeeper between incorporation and actual business operations for companies with share capital. Completing INC-20A correctly, with clear bank evidence and professional verification, prevents downstream penalties and keeps the company’s ROC record clean. Saving Mantra streamlines this flow with templates, document checklists, role assignments (who signs/attaches what), and reminders so you never miss the 180-day window.

---

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.

Statutory auditor appointment is a mandatory compliance requirement for every company under the Companies Act, 2013. Whether you are appointing the first auditor, subsequent auditor, or filling a casual vacancy, the procedure involves specific resolutions, documentation, and MCA filings.

This Saving Mantra guide explains the process in a clear, actionable workflow.

---

1. Types of Auditor Appointments

Before following the procedure, identify the category of appointment:

a) First Auditor

• Appointed by Board of Directors within 30 days of incorporation.
• If the Board fails, shareholders must appoint at an EGM within 90 days.

b) Subsequent Auditor

• Appointed in the AGM for a term of 5 years.
• Requires filing of Form ADT-1 with MCA.

c) Auditor Appointed Due to Casual Vacancy

• If auditor resigns or vacancy occurs due to other reasons, the Board appoints within 30 days.
• If vacancy is due to resignation, approval by shareholders in a GM is required within 3 months.

---

2. Step-by-Step Process for Auditor Appointment

---

Step 1: Obtain Written Consent & Eligibility Certificate

Before appointment, the proposed auditor must provide:

• Consent to act as auditor
• Certificate under Section 141 confirming eligibility, independence, and no disqualification
• Disclosure of:
  • Number of audits within permissible limits
  • Valid registration details
  • Compliance with ethical standards

---

Step 2: Hold a Board Meeting

The Board passes a resolution to:

• Approve appointment of the auditor
• Fix remuneration (if applicable)
• Authorize a director/CS to file Form ADT-1 and issue appointment letter

For first auditor appointments, Board resolution is sufficient (no shareholder approval unless the Board fails to appoint).

---

Step 3: Convene the AGM / General Meeting (if applicable)

For subsequent auditor appointment or resignation-related vacancy, a General Meeting is required.

Actions:

• Issue notice to members
• Include an ordinary resolution proposing the auditor’s appointment
• Present all eligibility documents and justification for appointment

---

Step 4: Members Approve the Auditor Appointment

In the AGM/EGM:

• Members pass the Ordinary Resolution
• Auditor is appointed for the specified term
• Remuneration is approved (unless delegated to the Board)

---

Step 5: File Form ADT-1 with MCA

This is a mandatory step for auditor appointments (except some first auditors).

Key details of ADT-1 filing:

• Filed within 15 days of appointment
• Attachments include:
  • Auditor consent letter
  • Eligibility certificate
  • Copy of resolution
  • Appointment letter (optional)

---

Step 6: Issue Appointment Letter to Auditor

The company must send a formal appointment letter specifying:

• Term and scope of audit
• Fees & payment terms
• Rights and duties of the auditor
• Expectations regarding reporting and timelines

---

Step 7: Update Statutory Registers & Records

• Update Register of Auditors
• Maintain all resolutions, notices, and returns in the statutory record book
• Ensure all digital files (supporting documents, ADT-1 SRN) are preserved for audit trail

---

3. Documents Required

• Consent letter from auditor
• Eligibility & independence certificate (Sec. 141)
• Board resolution
• EGM/AGM resolution (if applicable)
• Appointment letter
• Copy of resignation letter (if casual vacancy due to resignation)
• Form ADT-1 and its attachments

---

4. Timelines Overview

Activity	Time Limit
First auditor by Board	Within 30 days of incorporation
First auditor by shareholders	Within 90 days of Board’s failure
Subsequent auditor appointment	At every AGM
Filing ADT-1	Within 15 days of AGM/appointment
Casual vacancy appointment	Board within 30 days, GM approval within 3 months

---

5. Saving Mantra Tips for Smooth Auditor Appointment

• Ensure auditor is not disqualified under Section 141.
• Always obtain consent and certificate before passing resolutions.
• Double-check ADT-1 attachments; incorrect documents cause rejection.
• Keep resolutions and filings aligned to your internal compliance calendar.
• Use Saving Mantra’s centralized compliance workflow to automate reminders and maintain documentation.

---

Conclusion

Auditor appointment is more than a formal process—it ensures financial integrity, statutory compliance, and transparency in your organization. By following the correct procedure and timelines, companies avoid penalties and ensure smooth regulatory filings.

Saving Mantra helps businesses complete auditor appointments end-to-end, from drafting resolutions to filing ADT-1 and managing statutory registers.

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.

Every company registered under the Companies Act, 2013 must appoint a statutory auditor to ensure financial transparency, compliance, and reliability of accounts. The appointment of the auditor must be formally reported to the Ministry of Corporate Affairs (MCA) through Form ADT-1.

This blog provides a clear, step-by-step guide to filing ADT-1, required documents, timelines, and legal provisions—making the compliance process simple and error-free.

---

Introduction

ADT-1 is the official form used by companies to intimate the Registrar of Companies (ROC) about the appointment of their statutory auditor.

The appointment must be made:

• At the first AGM (Annual General Meeting), or
• By the Board of Directors in case of first auditor

Carrying out this filing correctly ensures compliance with Section 139 of the Companies Act, 2013. Failure to file ADT-1 may result in penalties.

---

Step-by-Step Process for Filing ADT-1

---

1. Identify the Type of Auditor Appointment

There are two scenarios:

a) First Auditor

Appointed by the Board within 30 days of incorporation.

b) Auditor at AGM

Appointed by shareholders for a term of 5 years (subject to AGM ratification if applicable).

---

2. Conduct the Board Meeting

The Board must:

• Approve the proposal for appointment
• Fix the auditor’s remuneration
• Authorize a director or company secretary to file ADT-1

A Board Resolution is mandatory.

---

3. Obtain Written Consent from the Auditor

The auditor must provide:

• Consent letter (Section 139(1) compliance)
• Certificate confirming eligibility under Section 141, including:
  • Not disqualified
  • Not holding limits beyond allowable audits
  • No conflicts of interest

These documents must be attached in ADT-1.

---

4. Pass the Resolution at the AGM (If Applicable)

For regular auditor appointment (not first auditor):

Shareholders pass an Ordinary Resolution in the AGM approving:

• Auditor’s name
• Tenure (usually 5 years)
• Remuneration

---

5. Prepare Documents Required for ADT-1 Filing

Mandatory Attachments:

1. Copy of the Board Resolution / AGM Resolution
2. Consent letter from Auditor
3. Eligibility certificate from Auditor
4. Intimation letter sent to Auditor (optional but recommended)

---

6. Fill the ADT-1 Form on MCA Portal

The form captures details such as:

• Company CIN
• Auditor’s name and firm registration number
• Tenure of appointment
• AGM date / Board meeting date
• Auditor’s address and PAN
• Category: First Auditor or Appointed in AGM

After validation, attach the required documents and digitally sign the form (DSC of Director/Secretary).

---

7. Upload ADT-1 and Pay Filing Fees

Filing fees depend on authorised share capital (as per Companies Registration Office norms).

Once fees are paid, the form is processed by the ROC.

---

8. ROC Approval

After successful processing, the ROC approves the form.
The company can download:

• Acknowledgement
• Challan with SRN details

This marks the completion of the statutory auditor appointment compliance.

---

Timeline for ADT-1 Filing

Scenario	Timeline
First Auditor Appointment	Within 15 days of appointment
Auditor Appointed at AGM	Within 15 days from date of AGM

Late filing attracts additional fees per day as per MCA norms.

---

Common Mistakes to Avoid

• Uploading incorrect board/AGM resolution
• Missing eligibility certificate
• Wrong CIN or auditor details
• Filing after the deadline
• Uploading scanned documents of poor quality

Saving Mantra ensures accuracy with automated templates, reminders, and compliance workflows.

---

Conclusion

Filing ADT-1 is a mandatory step for reporting the appointment of statutory auditors and maintaining financial governance under the Companies Act, 2013. By following the step-by-step process—right from board approval to ROC filing—companies can ensure timely compliance and avoid penalties.

Saving Mantra provides end-to-end support for MCA filings, ROC compliances, audit workflows, and automated governance dashboards, making compliance effortless for businesses.

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.

Changing a company’s name or its legal status (for example, converting a private company to a public company, converting an OPC, or altering the class/category of the company) is a statutory procedure under the Companies Act and requires board/shareholder approvals plus specific MCA filings. This guide gives you a concise, production-ready checklist and workflow so you can complete the process with minimal risk and delay. India Law Offices+1

---

Quick overview — two distinct processes

1. Name change — when a company formally alters its registered name (new Certificate of Incorporation issued). Learn by Quicko
2. Status (type/category) change — when the class or status of a company changes (e.g., private → public, OPC conversions, change in liability structure). This generally needs a special resolution and specific conversion forms. TaxGuru+1

---

Step-by-step: Changing Company Name

1) Board meeting — approve the proposal

• Convene a board meeting and pass a resolution authorizing the name change and authorizing an officer (director/CS) to take next steps (name search, convene EGM). Learn by Quicko

2) Check name availability / reserve name

• Search MCA name availability. Reserve the preferred name (through available MCA name reservation service or via prescribed process). (Recommendation: shortlist 2–3 alternative names.)

3) Convene an EGM & pass a Special Resolution

• Call an Extraordinary General Meeting and pass a Special Resolution under Section 13 (or relevant sections) approving the new name and any MOA/AOA alterations.

4) File MGT-14 (special resolution)

• File Form MGT-14 with ROC within 30 days of passing the special resolution. TaxGuru

5) File Form INC-24 (application for Central Government approval)

• After MGT-14 SRN, file INC-24 (Application for approval of Central Government for change of name) along with required attachments (altered MOA/AOA where applicable, copy of EGM notice/minutes, affidavit, service of advertisement if required). On approval, ROC issues a fresh Certificate of Incorporation with the new name. CAIRR+1

6) Post-approval compliance

• Once fresh Certificate of Incorporation is issued: update official stationery, bank accounts, GST registrations, tax accounts, EPFO/ESIC records and notify stakeholders (clients, vendors, banks). Update MCA records (ROC portal) and ensure website, signboards and legal documents reflect the new name.

---

Step-by-step: Changing Company Status / Type (e.g., Private → Public, OPC conversions)

Note: Specific attachments and eligibility conditions vary depending on the conversion type. Always verify the particular conditions before filing. Compliance Calendar LLP+1

1) Board meeting + EGM

• Board approves calling an EGM to seek members’ approval for conversion. Pass the Special Resolution necessary for conversion and alteration of MOA/AOA clause(s) (if applicable).

2) File MGT-14

• File Form MGT-14 within 30 days after the special resolution. TaxGuru

3) File the relevant conversion form

• Common MCA forms for conversions:
  • INC-27 — application for conversion of company type/category (frequently used for Private ↔ Public conversions). TaxGuru
  • INC-6 — conversion related to One-Person Company (OPC) in specific cases. IndiaFilings
• Attach the certified copies of resolutions, altered AOA/MOA, EGM minutes and other required annexures.

4) ROC review and issue of approval

• ROC examines the application and attachments. The ROC may ask for clarifications or additional documents. On satisfaction, ROC permits the conversion and updates the company status in records.

5) Post-conversion filings & operational updates

• Update bank accounts, contracts, regulatory registrations (GST, TAN, tax registrations), payroll records (PF/ESIC) and notify stakeholders. File any additional forms required by sectoral regulators (if applicable).

---

Documents typically required (name & status changes)

• Board resolution and minutes.
• Special resolution and EGM minutes (with attendance sheet).
• Copy of notice and explanatory statement (Section 102) where required.
• Altered MOA / AOA (where clause changes are required).
• Affidavit(s) by directors/CS (where required).
• NOC(s) from lenders or other stakeholders (if encumbrances exist).
• Any statutory declarations or sectoral approvals required for the specific change. ICSI+1

---

Key forms & timelines (at a glance)

• MGT-14 — File within 30 days of passing SR. TaxGuru
• INC-24 — For name change (file after MGT-14); application to Central Government/ROC for new name. CAIRR
• INC-27 — For conversion of company type/category (e.g., private → public). Compliance Calendar LLP
• INC-6 / others — Specific conversions (OPC related) where applicable. IndiaFilings

---

Practical tips from Saving Mantra

• Plan sequencing carefully. MGT-14 SRN is often required before filing the principal form (INC-24 / INC-27); missing sequence causes rejections. LegalWiz.in
• Document checklist. Prepare MOA/AOA drafts, certified copies of resolutions, and affidavits in advance to avoid delays.
• Stakeholder communications. Notify lenders, major vendors and the bank before initiating conversions to avoid operational friction.
• Use digital signatures. Ensure authorized signatories’ DSCs are valid to e-file forms without delay.
• Record retention. Keep certified copies and proof of filings for statutory records and audits.

---

Common pitfalls to avoid

• Filing INC forms before MGT-14 SRN is generated. TaxGuru
• Not attaching properly altered MOA/AOA or missing annexures.
• Ignoring sectoral or contractual constraints (e.g., approvals required under other laws).
• Failing to update statutory registrations (GST, PF/ESIC) after conversion/name change.

---

Conclusion — How Saving Mantra helps

Name and status changes require careful sequencing, precise documentation and timely e-filing. Saving Mantra offers end-to-end compliance support: drafting resolutions, preparing shareholder notices, validating documentation, e-filing with MCA, and post-filing regulatory updates. If you’d like, we can:

• Draft your board/EGM documents and MOA/AOA amendments, or
• Prepare the exact set of attachments for MGT-14, INC-24 or INC-27 and file them for you.

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.

One Person Company (OPC) is a popular structure for solo entrepreneurs and professionals who want limited liability and organized business operations. The incorporation process was earlier done using Form INC-2—a dedicated form for OPC registration and nomination of the sole member.

This blog explains the complete step-by-step process, documents required, nomination rules, and compliance aspects related to OPC incorporation through INC-2 (as applicable for reference and older cases).

---

Introduction

OPC was introduced under the Companies Act, 2013 to support individual entrepreneurs who want the protection of a company structure without the complexity of multiple shareholders.

Form INC-2 played a crucial role in:

• Filing the incorporation application
• Defining the member’s details
• Adding a nominee who automatically becomes the member if the original member dies or becomes incapacitated

Although the SPICe+ system has replaced INC-2 for new incorporations, many businesses still need step-based guidance for legal referencing, historical filings, and understanding the compliance structure.

---

Step-by-Step Process for INC-2 OPC Incorporation & Nomination

---

1. Check Eligibility for OPC Incorporation

Before applying through INC-2, ensure the applicant meets OPC conditions:

• Only one member allowed
• Member must be an individual and an Indian citizen
• Member must be a resident of India (stay ≥ 182 days in a year)
• A person cannot incorporate more than one OPC
• OPC must convert to a private/public company if thresholds are exceeded

---

2. Obtain Digital Signature Certificate (DSC)

The first step is obtaining a DSC for:

• Proposed Member
• Proposed Nominee
• Professional certifying the form (CA/CS/CMA)

Documents Needed:

• PAN
• Aadhaar / Address proof
• Photo
• Email & mobile OTP

---

3. Apply for Director Identification Number (DIN)

If the proposed director does not have a DIN, apply through:

• INC-3 (Nominee consent verification)
• DIN allotment inside the incorporation process

DIN becomes the unique director identity number.

---

4. Decide the Proposed Company Name

OPC name must follow the naming rules:

• Should end with “(OPC) Private Limited”
• Should not conflict with an existing trademark
• Must match the company’s main activity

You may conduct an optional RUN form name reservation.

---

5. Prepare Required Documents for Incorporation

Documents of Member & Nominee

• PAN
• Aadhaar
• Address proof (Bank statement / Electricity bill)
• Latest passport-size photo
• Email ID & mobile number

Documents for Registered Office

• Rent agreement / lease deed
• Owner NOC
• Utility bill not older than 2 months

Company Documents

• MoA (INC-33)
• AoA (INC-34)
• Declaration by professional (INC-8)
• Affidavit & declarations (INC-9)

---

6. Obtain Consent of Nominee – Form INC-3

Every OPC must have a nominee.

INC-3 includes:

• Nominee’s personal details
• Consent to act as member upon death/incapacity of original member
• Identity & address proofs

This consent is attached inside INC-2.

---

7. Fill Out Form INC-2 (OPC Incorporation Form)

INC-2 was the dedicated form for OPC incorporation.

Key details captured in INC-2:

• Member information
• Nominee details (pre-filled from INC-3)
• Company name
• Registered office address
• Capital structure
• MoA & AoA attachments
• DIN allotment request
• Professional certification

---

8. Attach Mandatory Documents in INC-2

Typical attachments include:

• MoA (INC-33)
• AoA (INC-34)
• Identity/address proof of member & nominee
• Registered office proof + NOC
• INC-3 (Nominee consent)
• Affidavits (INC-9)
• Professional certification
• Declaration of compliance

---

9. Certification by Professional

A practicing CA/CS/CMA must verify the form.
They confirm:

• Applicant eligibility
• Validity of documents
• Compliance with Companies Act

Incorrect certification can lead to penalties.

---

10. Upload INC-2 on MCA Portal & Pay Fees

Once the form is signed and validated, upload on the MCA portal.
Fees depend on:

• Authorized capital
• Stamp duty based on state

---

11. MCA Processing & Certificate of Incorporation (COI)

After verification, MCA issues the Certificate of Incorporation, which includes:

• CIN (Corporate Identification Number)
• PAN
• TAN
• Date of Incorporation

This confirms that the OPC is legally formed.

---

Post-Incorporation Requirements

Once the OPC is incorporated, the company must:

• Open a bank account
• Appoint auditor within 30 days
• File INC-20A (Commencement of business)
• Maintain statutory registers
• Keep accounting books
• Follow annual ROC filings (AOC-4 & MGT-7A)

---

Advantages of OPC Registration

• 100% control with one individual
• Limited liability protection
• Easy to manage
• Lower compliance compared to private limited
• Smooth conversion into a private company when business grows

---

Conclusion

INC-2 was an important form in the history of OPC incorporation—covering member details, nominee appointment, and complete company setup in one place. Understanding its step-by-step structure helps entrepreneurs, consultants, and compliance professionals navigate OPC regulations more confidently.

Saving Mantra supports entrepreneurs with OPC registration, MCA filings, legal documentation, and a complete compliance dashboard to manage their business seamlessly.

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.

Changing the registered office address of a company is a crucial compliance task governed by the Companies Act, 2013. Whether your business is expanding, relocating, or shifting operations, it’s essential to follow the correct legal procedure to ensure smooth updates with the Ministry of Corporate Affairs (MCA).

This guide from Saving Mantra outlines the complete step-by-step process, required documents, forms, timelines, and compliance workflow for changing a company’s registered office.

---

1. Understand the Type of Change in Registered Office

Before applying for a change, determine which category your shift falls under:

a) Within the Same City / Town / Village

• This is the simplest category.
• Only Board Resolution and Form INC-22 filing required.

b) Within the Same ROC but Outside Local Limits

• Requires Board Resolution, Special Resolution, and Form MGT-14 + INC-22.

c) From One ROC to Another ROC within the Same State

• Requires Regional Director (RD) Approval.
• Additional documentation and justification needed.

d) From One State to Another State

• Most complex.
• Requires Special Resolution, Alteration of MOA, Approval from RD, and multiple filings.

---

2. Step-by-Step Process for Changing Registered Office

Step 1: Hold a Board Meeting

• Pass a Board Resolution approving the proposal to change the registered office.
• Authorize a director or CS to file forms with MCA.
• Decide whether an EGM (Extraordinary General Meeting) is required based on the type of shift.

---

Step 2: Issue Notice for General Meeting (If Applicable)

For changes outside local limits or state:

• Send notice to shareholders at least 21 days before the meeting.
• Attach explanatory statement under Section 102.

---

Step 3: Pass Special Resolution (If Required)

In the EGM:

• Approve the registered office change.
• Approve amendment of MOA (for inter-state changes).

File Form MGT-14 within 30 days of passing the resolution.

---

Step 4: Obtain Required Approvals

Depending on the type of shift:

Type of Shift	Approval Needed
Within same city	No external approval
Outside local limits	Shareholders’ approval
Change of ROC within same state	Regional Director Approval
Change of State	Regional Director Approval + MOA amendment

---

Step 5: File Form INC-23 (For RD Approval)

(Only for ROC or State change)

Include:

• Board & Special resolutions
• Notice and minutes of EGM
• Altered MOA
• Valuation report / justification letter
• Creditors’ NOC

---

Step 6: File Form INC-28

After RD approval order, file INC-28 with MCA to register the order officially.

---

Step 7: File Form INC-22 (Change of Registered Office)

This is the final step for all categories.

Attach:

• Proof of new address (utility bill not older than 2 months)
• NOC from property owner
• Rent agreement / lease deed
• Photograph of external building with nameplate

Once approved, the new registered office address is updated in the MCA records.

---

3. Documents Required

• Board resolution
• Special resolution (if applicable)
• Notice and minutes of EGM
• Altered MOA (for state change)
• Utility bill of premises
• Rent agreement / ownership proof
• NOC from owner
• List of creditors (for RD cases)
• Affidavit verifying no objections or pending litigation
• RD approval order (if applicable)

---

4. MCA Forms & Timeline Summary

Form	Purpose	Timeline
MGT-14	Filing special resolution	Within 30 days
INC-22	Update office address	Within 30 days of change
INC-23	Application to RD	For ROC/State change
INC-28	Filing RD order	Within 30 days

---

5. Practical Tips from Saving Mantra

• Ensure utility bill and NOC are updated and correctly signed.
• Keep company name board properly displayed at the new address before uploading photos.
• For state change, communicate with all stakeholders—banks, GST, PF, ESIC, and other authorities—for smooth transition.
• Use a centralized workflow system (Saving Mantra CRM/Compliance module) to manage documents, reminders, and filings.

---

Conclusion

Changing the registered office of a company is a structured legal process requiring proper resolutions, documentation, and MCA filings. By following the above steps, businesses can ensure seamless compliance without penalties or delays.

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.

Directors are the key managerial personnel responsible for guiding and managing a company’s operations. Appointing the right director ensures business continuity, compliance, and strategic growth.

The Companies Act, 2013 lays down a structured procedure for the appointment of directors, including mandatory documentation, board approvals, and filings with the Ministry of Corporate Affairs (MCA).

This blog provides a simple, practical, step-by-step guide on how to legally appoint a director in an Indian company.

---

Types of Directors Under Companies Act, 2013

Before understanding the appointment process, it is important to know the types of directors:

• Executive Director
• Non-Executive Director
• Independent Director
• Additional Director
• Alternate Director
• Nominee Director
• Managing Director / Whole Time Director

Each category serves a specific governance purpose.

---

Step-by-Step Process for Appointment of Director

---

Step 1: Check Eligibility Criteria

A person being appointed must meet the basic requirements:

• Minimum age: 18 years
• Must not be disqualified under Section 164
• Must have a valid DIN (Director Identification Number)
• Consent to act as a director

If a person does not have a DIN, it must be obtained first.

---

Step 2: Obtain DIN (if not already available)

DIN can be obtained through:

• SPICe+ form (during company incorporation), or
• DIR-3 (for existing companies)

Documents required:

• PAN
• Aadhaar
• Photograph
• Email & mobile
• Board resolution (for DIR-3)

---

Step 3: Collect Necessary Documents from Proposed Director

Mandatory documents include:

• DIR-2 (Consent to act as Director)
• DIR-8 (Declaration regarding non-disqualification)
• ID proof & address proof
• Digital signature (if required)

---

Step 4: Convene Board Meeting

The company must call a Board Meeting:

Agenda includes:

1. Taking note of DIR-2 & DIR-8
2. Passing resolution for appointment
3. Authorizing filing of ROC forms

If appointing an Additional Director, the Board has authority under Section 161.

---

Step 5: Pass Board Resolution

A Board Resolution is passed to appoint the director.

The appointed director serves:

• Until the next AGM (if Additional Director)
• For the tenure mentioned in the resolution

---

Step 6: Shareholder Approval (if required)

In certain cases, appointment requires an Ordinary Resolution at the AGM/EGM:

Required when:

• Appointing a new director in a public company
• Regularizing an Additional Director
• Appointing directors requiring shareholder consent

Resolution is passed through voting.

---

Step 7: File Form DIR-12 with ROC

After appointment, the company must file Form DIR-12 within 30 days.

Attachments:

• Board Resolution
• DIR-2 Consent
• Letter of Appointment
• Shareholder resolution (if applicable)

ROC updates the MCA portal with the new director details.

---

Step 8: Update Statutory Registers

Company must update:

• Register of Directors & KMP
• Register of Shareholdings (if director holds shares)

These registers must be maintained at the registered office.

---

Step 9: Issue Appointment Letter

A formal appointment letter is given to the director mentioning:

• Tenure
• Duties and responsibilities
• Terms & conditions
• Remuneration (if applicable)

---

Step 10: Disclosure by Director

Director must give disclosure of interest in:

• Form MBP-1 (under Section 184)
• Including relatives, firms, shareholdings

This must be submitted at the first board meeting.

---

Common Reasons to Appoint a Director

Businesses appoint new directors for:

• Expansion and growth
• Strengthening governance
• Replacing a resigned director
• Adding financial or domain expertise
• Meeting minimum director requirements
• Investor or lender nomination

---

Consequences of Non-Compliance

Not following the correct process can lead to:

• ROC penalties
• Invalid appointment
• Disqualification risks
• Issues during audits or funding

---

How Saving Mantra Supports You

Saving Mantra provides end-to-end services for:

• Drafting board & shareholder resolutions
• Filing DIR-12 and supporting MCA forms
• DIN application assistance
• Maintaining statutory registers
• Compliance advisory for director appointments

✔ Fast processing
✔ 100% MCA-compliant
✔ Professional CA/CS assistance

---

Conclusion

The appointment of a director is a formal and legally regulated process. From DIN verification to ROC filings, each step must be carefully completed to ensure valid and compliant onboarding of directors.

With proper guidance and accurate documentation, the process becomes smooth and error-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.