Is a PAN Card Required for Company Incorporation?

Last Updated at: Feb 02, 2021
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Is a PAN Card Required for Company Incorporation
The IT department has once again extended the deadline for linking of PAN and Aadhaar. Now, you have time till March 31, 2020 to link your Aadhaar card with the PAN card.
  1. Role of PAN Card in the company incorporation process

  2. Documents required for a company PAN Card

  3. Why does your company require a PAN Card?

A PAN Card is a must for all individuals, companies, partnerships, etc. If you are a company, your company pan card is regarded as your tax identity. In India, you need to have a Business PAN Card Required, irrespective of whether your business is incorporated in India or abroad.

Role of PAN Card in the company incorporation process

When it comes to the company incorporation process in India, the requirement of PAN depends on the nationality of the applicant. At the time of company incorporation, all intending directors need to apply for the DIN (Director Identification Number) by submitting the eForm DIR-3.  Moreover, the concept of DIN introduction in 2006 by inserting Sections 266 A to 266 G in the Companies Act. Additionally, DIR-3 is one of the most important documents required for company registration.

In the DIR-3 form, the director needs to specify his nationality and residential status. If he is an Indian national, he needs to submit his PAN card during the incorporation of the company. He also needs to get his PAN details verified online. If he is a foreign national and needs to have a PAN (as per Income Tax Act provisions), his PAN details will be mandatory in the DIR-3 form. However, if he is not compulsorily to have a PAN as per the IT Act, PAN details are not mandatory in the DIR-3 form. This requirement can asset by the authorities on the date of the application.

After he enters the PAN in the DIN application, he needs to get the verification. Further, this can be on clicking the ‘Verify Income Tax PAN’ button on the eForm DIR-3. Additionally, In case the authorities find any discrepancy, his verification will be unsuccessful and he will not have the allowance to file the DIR3 application.

If he is a foreign national and is not to have a PAN as per IT Act provisions, there is a way out for him. Moreover, he needs to submit a copy of his passport, along with a declaration. Additionally, in the declaration, he needs to state that the mandatory requirement of PAN does not apply to him.

Documents required for a company pan card

The following are the documents you need to furnish while applying for a business pan card for your private limited company-

1. For companies incorporated in India

  •  Copy of the Certificate of Incorporation/company registration documents issued by the Registrar of Companies (RoC)
  • Partnership Deed or Certificate of Registration from the Registrar of Firms (For applying pan card for partnership firm)
  • Proof of address for  the registered office of the company
  • A Demand Draft of the requisite fee (if the payment is made offline)

 2. For companies incorporated abroad

  •  Copy of the company registration documents issued in the country of incorporation. Additionally, the same needs to get the attestation by “Apostille”*/ Indian Embassy/ consulate /Indian High Commission/ authorized officials of branches of Schedule Indian Banks in the country of incorporation.

Or

  • Moreover, copy of the company registration documents issued in India, with the approval by Indian authorities to establish an office in India.

 *Please note

If you are a foreign company, you need to apostille all the documents required for company registration you want to furnish along with your company pan card.  The company registration documents validated by an apostille are accepted by all the countries that are members of the Hague Convention (for Abolishing the Requirement of Legalization for Foreign Public Documents) of 1961. India is a member of this convention and is one of the signatories of the treaty. Moreover, if your country is also one of the members, no further requirement authorization of documents after you get them.

Why does your company require a PAN card?

  1. You need it to track all the financial activities of your company. You must mention your PAN in all invoices and remittances and also while making any kind of financial transactions.
  2. Additionally, if you do not have a PAN, you can consider as by the Department to be concealing important information. It can relate to your financial transactions.
  3. If your company is without a PAN, you can’t enjoy the tax benefits offered by the Government of India and you will be liable to pay taxes at the highest rate applicable.
  4. You need to provide your TRN (Tax Registration Number) to whoever is making payments to your company. You can’t obtain a TRN if you are without a company pan card.
  5. If you do not have a business pan card, the government is at liberty to levy withholding tax on you. This may start from 30% of your total invoiced amount.

 

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