Mandatory KYC of Director Indentification Number (DIN)

CS Charu Aggarwal 

The Ministry of Corporate office has been proactive and introducing more and more compliances to properly regulate and monitor the working and functioning of all the companies. Accordingly, a great and huge step is taken towards it and a major amendments is made insertion of Rule 12A in the “The Companies (Appointment and qualification if Directors) Rules, 2014” with a view to know about director status of the companies.

INTRODUCTION

The concept of e-form DIR-3 KYC was introduced on 05.07.2018 vide notification no. G.S.R. 615(E) which came into force on 10^th July 2018.

Accordingly, new rules were introduced which are reproduced here under for reference:

Rule 12A inserted after Rule 12 of the Companies (Appointment and Qualification of Directors) Rules, 2014 as follows:

“Every individual who has been allotted a Director Identification Number (DIN) as on 31^st March of a financial year as per these rules shall, submit e-form DIR-3 KYC to the Central Government on or before 30^th April of immediate next financial year.

> Provided that every individual who has already been allotted a Director Identification Number (DIN) as at 31st March, 2018, shall submit e-form DIR-3 KYC on or before 31st August, 2018.”

But due to unawareness of filing of DIR-3 KYC and in order to allow directors and stakeholders some more time to comply with above provisions the above Proviso was amended w.r.t. Notification no. G.S.R. 798 (E) dated 21st August 2018 as:

> “Provided that every individual who has already been allotted a Director Identification Number (DIN) as at 31st March, 2018, shall submit e-form DIR-3 KYC on or before 15^th September, 2018.”

Thereafter, the proviso was further amended w.r.t. notification no. 904(E) dated 20th September 2018 as follows:

> “Provided that every individual who has already been allotted a Director Identification Number (DIN) as at 31st March, 2018, shall submit e-form DIR-3 KYC on or before 5^th October, 2018.”

APPLICABILITY

All the Individuals (whether Indian or any other nationality and whether residing in India or not) having DIN as on March 31 are required to file KYC form.

REQUIREMENTS AND DOCUMENTS

The E- Form DIR-3-KYC has to filed with below given documents:-

a) One (1) ID Proof (Driving License, Passport, PAN Card, Voter ID, Aadhar card)

b) One (1) Address Proof (Driving License, Passport, Voter ID, Aadhar card, Utility Bill not later than 2 months, Bank statement e.t.c.)

c) Personal Mobile Number and Email-ID for OTP verification

Note: separate documents are to be produced for ID proof and Address proof, same document can not be considered for both.

PENAL PROVISIONS

Those who have not complied with the above provisions; have to face the penalty under Rule 11(2) & (3) of The Companies (Appointment and Qualification of Directors) Rules, 2014 which are inserted after existing Rule 11(1) and reproduced hereunder:

> As per Rule 11(2) & (3):

“(2) The Central Government or Regional Director (Northern Region), or any officer authorize by the Central Government or Regional Director (Northern Region) shall, deactivate the Director Identification Number (DIN), of an individual who does not intimate his particulars in e-form DIR-3-KYC within stipulated time in accordance with Rule 12A.

(3) The de-activated DIN shall be re-activated only after e-form DIR-3-KYC is filed along with fee as prescribed under Companies (Registration Offices and Fees) Rules, 2014 and fees prescribed is Rs. 5000/-”

OTHER IMPORTANT RELATED FAQs:

a) Whether the Director of a strike off/ amalgamated company is required to be done KYC?

– Yes, in case the individual wants to be a director in future because KYC is related to individual holding DIN.

b) Whether a director holding who is not appointed in any company is required to file the same?

– Yes

c) Is there any fee for filing the form?

– No, the form is filed for NIL amount, if filed upto the prescribed time.

d) Within how many days the form is to be filed?

– The form is to be filed within the time limit as prescribed by the MCA Notification.

e) What will be the consequences for not filing DIR-3KYC form?

– The DIN of the concerned individual will be deactivated by the concerned regulatory authority, apart from this the individual would not be able to file any form wherever his DIN is filed.

f) Status of e-form as on date:

– Not yet deployed

(Author can be reached at caggarwalpcs@gmail.com or on 9996796365)