Director Identification Number (DIN) – KYC

Recently, all those who have Director’s Identification Number (DIN) have received the following communication thru email from Ministry of Corporate Affairs (MCA):

“As part of updating its registry, MCA would be conducting KYC of all Directors of all companies annually through the new eform viz. DIR-3 KYC. Accordingly, every Director who has been allotted DIN on or before 31st March 2018 and whose DIN is in 'Approved' status, would be mandatorily required to file form DIR-3 KYC on or before 31st August 2018. While filing the form, the Unique Personal Mobile Number and Personal Email ID would have to be mandatorily indicated and would be duly verified by One Time Password (OTP). The form should be filed by every Director using his own DSC(Class 2) and should be duly certified by a practicing professional (CA/CS/CMA). Filing of DIR-3 KYC would be mandatory for disqualified Directors also.

After expiry of the due date by which the KYC form is to be filed, the MCA21 system will mark all approved DINs (allotted on or before 31st March 2018) against which DIR-3 KYC form has not been filed as 'Deactivated' with reason as 'Non-filing of DIR-3 KYC'. After the due date filing of DIR-3 KYC in respect of such deactivated DINs shall be allowed upon payment of a specified fee only, without prejudice to any other action that may be taken.”

There are few friends who have DIN but they are no longer a director of any company or there are DIN holders who are ‘very senior’ citizen like 80+ years old and no more active as a director of any company.  In such cases whether such KYC process is required?  If they don’t do such KYC process, then what happens?  The above email says – “… after the due date filing of DIR-3 KYC in respect of such deactivated DINs shall be allowed upon payment of a specified fee only, without prejudice to any other action that may be taken.”

Few friends asked me whether they could surrender their DIN? 

DIN can be surrendered only in the following situations pursuant to Rule 11 of the Companies (Appointment and Qualification of Directors) Rules, 2014 -

1.       the DIN is found to be duplicated in respect of the same person provided the data related to both the DIN shall be merged with the validly retained number;

2.       the DIN was obtained in a wrongful manner or by fraudulent means;

3.       of the death of the concerned individual;

4.       the concerned individual has been declared as a person of unsound mind by a competent Court;

5.       if the concerned individual has been adjudicated an insolvent:  Provided that before cancellation or deactivation of DIN pursuant to clause (b), an opportunity of being heard shall be given to the concerned individual;

6.       on an application made in Form DIR-5 by the DIN holder to surrender his or her DIN along with a declaration that he has never been appointed as a director in any company and the said DIN has never been used for filing of any document with any authority, the Central Government may deactivate such DIN.  Provided that before deactivation of any DIN in such case, the Central Government shall verify e-records.

So get DIN KYC done before the due date which is 31^st August 2018* or file DIR-5 for cancellation of DIN, if conditions fulfilled (point 6 above) or take proper professional advice.

(*The last date was extended till 15th September, 2018 without fee and now till 5th October, 2018 with a fee of Rs. 500.  Normal fee is Rs. 5,000.)

Disclaimer:

Information provided/shared is of general nature.  You should seek appropriate advice for your own situation.  You are highly encouraged to find and understand your obligations regarding disclosure and action.  And the author is in no way responsible for any action/non action or consequence to anyone based on this note.