Types of Digital Signature Certificate

18 May 2026

The procedure of company registration is complete with a digital signature. A digital signature refers to a super-secure impression of the director's name that is used to sign or attest to all those official forms like SPICe+. Without this digital passport, the registration of a company is not possible. Simply put, it consists of powerful cryptographic codes that prove to the government exactly who you are. This innovative signature idea makes it almost impossible to forge your identity online.

But there is not just one, but different categories or types of digital signatures, depending on which one you are using. These crucial documents can be scammed. To prevent these malicious attempts, the government's Controller of Certifying Authorities (CCA) has made major upgrades to how it works.

Let’s go through a simple explanation of its different types.

The Great Simplification: Out with the Old Classes!

A few years ago, starting a business might need you to deliver or enclose Class 2, Class 2, and Class 3 certificates. They used to have a specific cost. But today, it’s not possible because these services are obsolete. 

The government audited and found that having three different types of digital signatures does nothing good but create confusion for laymen. Moreover, the security issue was also enclosed.

• Class 1: This type of signature no longer exists because it only verified an email ID. 
• Class 2: This signature was also discarded by the government. Majorly, it used to simplify the standard tax filing and registering basic companies’ procedures. Security was a major concern, though. It was not sufficient. 
• Class 3: This type of signature is still alive. Class 3 is the only valid type of digital signature certificate to procure in India. It is not only highly secure but also requires you or chartered accountants to quickly verify via a live video proving that you are a real human before you get it. 

The 3 Functional Types of Digital Signatures

The aforesaid description has clarified all three types of digital signatures pervasive in India. Here are the insights into the key functions of a Class 3 digital signature:

1. The "Sign Only" Certificate (Signing DSC)

Being the most common type, the primary role of this digital signature is to empower you to sign documents digitally. You just upload this certificate, and that’s it! You have attested to papers online. 

Signing a DSC on an electronic form completely locks the document. It completely ends the possibility of changing even a single letter once it is signed. The portal will instantly show a red flag, stating that the document was tampered with.

• Who uses it: Company directors, chartered accountants, and everyday business owners.
• What it's for: Basically completes procedures of registering your new company on the MCA Portal, filing GST returns, and submitting your yearly income tax returns (ITR).

2. The "Encryption Only" Certificate (Encryption DSC)

This type of digital signature is to prohibit vulnerability or breaching attempts. It does not allow you to sign your name but to spy on who is tampering with the data. Simply put, it acts as a secret code to scramble data.

This type of encryption, DSC, or signature is used to send highly confidential information or a secret financial bid to the government. The encrypted code completely ensures that nobody, not even a sneaky hacker, can see your confidential file while it is in transit. Only the authorized person holds its digital key to unlock and read. 

3. The "Combo" Certificate (Sign & Encrypt)

This is the ultimate power, empowering the director to combine both the signing and encryption certificates into one single device. So, directors or business owners simultaneously sign a document that needs their identity proofs. It encrypts the document while maintaining complete secrecy. 

• What it's for: This type of certificate is mandatory to apply for high-value government tenders or bids online, which is called e-Tendering or e-Procurement.

Who is the Signature For? (User Categories)

This is basically regarding class 3 signatures. When you apply for it on a licensed portal like eMudra or Capricorn, the system will want to know “why” first. So, it provides two choices to apply for: 

• Individual DSC: This is issued in the name of a specific human being, like a founder or director of a company, by enclosing their personal PAN and Aadhar card to authenticate identity. 
• Organization DSC: This is issued in the name of the company itself. To get this, you have to upload your official company incorporation documents to prove the business is legitimately registered.

How Do You Keep a Digital Signature Safe?

As cybercrimes are disastrous, a Class 3 DCS is as powerful as a real-life thumb impression or signature. A scammer can peep into the storage where you have saved it and misuse it. 

The law states that your digital signature must be locked on a physical and password-protected device called a cryptographic USB token (they look exactly like small pendrives, often called ePass2003 tokens). Before signing a document, you must turn it on on your laptop and then enter the secret PIN to access it. Then only will it apply your digital signature where you require it. 

Alternatively, you can rely on less secure cloud-based DSCs, where your key is stored on a highly secure government-approved cloud server. It will work only when you authorize signatures using multi-factor authentication on your phone.

Quick Summary for Smart Kids

A digital signature is as vital as your physical signature is. To apply for this one, the director of the company must follow these steps. However, the chartered accounting consulting firm also guides you through the process of getting a Class 3 "combo" (sign + encrypt) certificate.

For personalized queries, contact CAAQ Consultancy and discuss your digital signature-based goals.