As the Ministry of Corporate Affairs has started overhauling and cleaning its records and registry, it has initiated the process of Annual KYC of all the Directors (e-form DIR-3KYC) and giving a snag to the irregularities occurred due to outdated filing and unsystematic procedures. In the Editorial, Author has made an effort to throw light on the origin of KYC process and answers of few much-asked questions by the stakeholders and suggestions to make it easier and risk-free for a professional certifying the Form.

What are the Notifications on Annual KYC of all the Directors :

The Ministry of Corporate Affairs (MCA) initiated the KYC of prescribed Directors vide Notification dated 05th July 2018 through the Companies (Appointment and Qualification of Directors) fourth Amendment Rules, 2018 and the Companies (Registration Offices and Fees) Third Amendment Rules, 2018 which came into force on 10th July 2018.

The Companies (Appointment and Qualification of Directors) fourth Amendment Rules, 2018 empowers the Central Government or Regional Director or any other Officer authorized by the Central Government or Regional Director (Northern Region) to deactivate the Director Identification Number (DIN) of a Director who does not intimate his particulars in e-form DIR-3KYC within 30th April of every year. Directors who do not intimate their particulars in DIR-3KYC, will have their DIN deactivated with reason as ‘Non-filing of DIR-3KYC’ and will have to pay a fee of Rs. 5000 after the due Date i.e. 30th April of every year.

Note: For the Financial Year 2018-19 the due date of intimation in e-form DIR-3KYC is 31st August 2018 and after that a fee of Rs. 5000 shall be payable. Therefore, every Director who has been allotted DIN before 31st March 2018 and is in ‘Approved’ status shall be required to file e-form DIR-3KYC before 31st August 2018.

The e-form DIR-3KYC can be downloaded from MCA Website.

DIR-3 KYC

Pre-Requisites of filing DIR-3KYC for an Indian Directors:

  • PAN (not of Companies) and Unique Identity Card (Aadhar Card).
  • Residence Proof- Bank Statement Electricity Bill, Telephone or Mobile bill not older than 2 months.
  • Unique Phone Number and Email id which will be verified through an OTP.

Pre-Requisites of filing DIR-3KYC for a Foreign Nationals:

  • Passport- A valid and updated Passport not more than 1 year old
  • Residence Proof- Any appostiled Utility Bill, Driving License, Bank Statement
  • Unique Phone Number and Email id which will be verified through an OTP.

Important Points to notice for filing DIR-3KYC:

  1. Details of Indian Nationals must be entered based on the PAN, in case of difference between both, the Form will not be checked.
  2. The Form does not compel to enter Passport number (until you select ‘yes’) or Voter ID number, but as per Section 448 read with Section 447, any omission of Material Facts may cause this act of omission as fraud.
  3. The Email Address should not be related to any other Director or Certifying Professional and it should be personal (i.e Gmail or Yahoo etc.) and not Official.
  4. OTP to be valid for 15 minutes only.
  5. There is no clarity in the Form as what should be construed as a Permanent Residence Proof, but after close observation of Rule 16 (1)(n) of the Companies (Incorporation) Rules, 2014, we can conclude that Bank Statement Electricity Bill, Telephone or Mobile bill should only be taken as Residential Proof.
  6. The Permanent of Foreign Director should be a Foreign Address.
  7. Unique Phone Number of the Foreign citizen should be a foreign number however foreign citizen residing in India can be an Indian Number.
  8. Attachments should be attested as mentioned in the Companies (Incorporation) Rules 2014 and also point (2) of Certification part of the e-form DIR-3KYC.

Few Frequently Asked Questions on filing of file e-form DIR-3KYC :

1. Whether a Director having DIN but has never appointed Director in any Company is required to file e-form DIR-3KYC?

Ans: Yes, All individuals have to update the KYC having DIN irrespective of the fact such individuals ever held directorship in any company or not.

2. Whether a Disqualified Director also required to file e-form DIR-3KYC?

Ans: Yes, Directors having ‘Approved’ status has to file the e-form mandatorily.

3. Whether a person holding a DPIN (Designated Partner Identification Number) is required to file e-form DIR-3KYC?

Ans: Yes, DPIN is same as DIN. Therefore holders of DPIN are also required to file e-form DIR-3KYC.

4. Whether the Certifying Professional, being a Director can himself affix DSC in the capacity of Director as well as Professional?

Ans: No, A person cannot certify or verify his own documents so there some other professional must be engaged for certification.

5. What to do if the Details of Directors varied from the details on MCA?

Ans: In this case, the Director has to first file e-form DIR-6 and update the latest information and then file e-form DIR-3KYC.

6. When shall the OTP be generated?

Ans: The OTP shall be generated once the Form is duly filled and the pre-scrutiny check is done.

7. Who can certify the e-form DIR-3KYC?

Ans: The Form can be certified by any Practicing Professional preferably a Company Secretary.

8. What can be done if e-form DIR-3KYC is not filed till 31st August 2018?

Ans: The Director has to file the e-form with an additional fee of Rs. 5000 after 31st August 2018.

Although care has been taken to ensure the accuracy, completeness & reliability of the information provided, Author is not responsible for any errors or omissions in the article, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.

(In case of any discussion or discussion/ suggestions, Author can be reached for further details at [email protected])

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