CS Divesh Goyal

Provisions related to Director Identification Number (DIN) Under Companies Act, 1956 and Under Companies Act, 2013

 Companies Act, 1956

As per Section 266A of Companies Act, 1956:  Every individual intending to be appointed as director of Company should obtain Director Identification Number (DIN).

As per Section 266C of Companies Act, 1956:  No individual, who had already been allotted a Director Identification Number under Section 266B, shall apply, obtain or process another Director Identification Number.

As per Section 266G of Companies Act, 1956:  If any individual or director, referred to in section 266A or section 266C, contravenes any of the provisions of those sections, every such individual or director or the company, as the case may be, who or which, is in default, shall be punishable with

  • Fine which may extend to Rs. 5000/- (five thousand rupees only) and
  • where the contravention is a continuing one, with a further fine which may extend to Rs. 500/- (five hundred rupees) for every day after the first during which the contravention continues.

Companies Act, 2013

As per Section 153 of Companies Act, 2013:  Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed.

As per Section 159 of Companies Act, 2013: If any individual or director of a company, contravenes any of the provisions of Section 153, such individual or director of the company shall be punishable with

  • imprisonment for a tem which may extend to Six month or
  • with fine which may extend to Rs. 50,000/- and
  • Where the contravention is a continuing one, with a further fine which may extend to Rs. 500/- for every day after the first during which the contravention continues.

HAVING TWO DINs WHAT TO DO AND HOW TO CHECK IF ONE IS HAVING TWO DINs?

This article is especially for the person who has obtained more then 1 (One) DIN at any time. We came to know that Regional Director (Noida) has issued “Show Cause Notice U/s 266G of the Companies Act, 1956” to more than 2 Lac Persons.

If any person not received “Show Cause Notice” and having two DIN, we will advise that person to surrender One DIN and file petition with CLB for Compounding of Offence.

** One should preferably cross check from the MCA website that whether he is occupying more than one DIN as per process given below:

STEPS:

1. Go to MCA website Link:   http://www.mca.gov.in/

2. Log in by your user ID on MCA website.

3. Click on “Companies/LLPs in which a person is/was a  director/Designated Partner”

4. Click on Search Button in from of DIN/DPIN

5. Mention the Name, Father Name and Date of Birth and search.

6. MCA will display the  DIN No. allotted to you.

If one find more than one DIN. He should immediate took steps to surrender the duplicate DIN, preferably which are not in use as per process given below:

(Practical Example: One of my client received show cause notice from the Ministry for surrender of duplicate DIN. While I was preparing the surrender application and searching on MCA, I came to know that person have THREE DIN. Therefore it is advisable that one should even check on the MCA website whether he/she is occupying more than, even if he/she has not received any notice)

PROCESS FOR SURRENDER/CANCELLATION/ OF ADDITIONAL/DUPLICATE/ EXTRA DIN:

Section 153 read with rule 11 of The Companies (Appointment and qualification of Directors) Rule, 2014

(a) Holder of duplicate DIN shall make an application for surrender with Regional Director,

(b)  The application shall be made in form DIR-5.

(c)  The application  shall  be accompanied   with  a declaration  on  affidavit duly notarized that he has never been appointed as director in any company and the said DIN has never been used for filing of any document with any authority.

(d) The form DIR-S is physical form so form DIR-S will be attach in form RD-1 and filed with Regional Director.

Attachments of RD- 1:

+ DIR-S

+ Self attested copy of PAN Card

+ Self attested copy of Passport

+ Affidavit of surrender of DIN (Draft Attached) +  Board Resolution, if any (Draft Attached)

(e)    The Central Government will check E-records.

INFORMATION REQUIRED TO BE MENTIONED IN DIR-5:

1. Name & Din of applicant

2. Reason for surrender of DIN

3. PAN

4. Passport No, if any.

5. Permanent resident address.

6. Phone No & Email ID

7. DSC of Person himself

INFORMATION REQUIRED TO BE MENTIONED IN RD- 1:

1. Mention CIN of Company in which you are director from original DIN.

2. Purpose- Other

3. Purpose-Surrender of DIN

4. Detail of application

5. DSC of person himself! any director of Company.

NOTE:

  • The e-Form will be processed by the office of Regional Director (Non STP).
  • Fee as per Annexure A of RD-1 instruction kit.
  • A company can seek approval from Regional Director by filing application in e- Form RD-1 for certain mentioned purposes under Companies Act, 2013.
  • Corresponding form 24A as per Companies Act, 1956.
  • Please note that giving false statement or evidence is punishable under section 448 and 449

After surrender of DIN one should also apply to Company law Board (CLB) u/s 621A of Companies Act, 1956 for Compounding of Contravention of Section 266G of Companies Act, 1956)

Corresponding section of 621A is Section 441. Section 441 is still not applicable so application will be file as per Section 621A of Companies Act, 1956.

Which authority has Power to compound the offence?

  • The offence can be compounded by the Regional Director (RD) where the maximum amount of fine is upto Rs.50,000/-
  • By the Company Law Board (CLB) where the maximum amount of fine exceeds Rs.50,000/-.

PROCESS FOR COMPOUNDING OF OFFENCE (MORE THAN ONE  DIN):

Provisions and procedure for Compounding of offences, which are punishable under Companies Act, 1956 are stipulated under section 621A of the act.

MEANING OF WORD COMPOUNDING:

The meaning of word compounding of offence is not defined under Companies Act, 1956. However if we try to analyze the section 621A.

we can draw one clear interpretation i.e. “It`s nothing but admission of guilt” In the process of compounding, the person may either Suo Moto or on receipt of notice of default/initiation of prosecution, admits the commission of default and make an application for compounding of the concern offence.

The defaulters agree to pay penalty which may be ordered by the Central Government. We will try to analyze the provisions and procedure of compounding.

Turning to the procedural part, we must understand the basic provisions relating to compounding and authorities to be approached for compounding of offence.

Important provisions pertaining to Compounding of Offences

APPLICABILITY: –

Only those offences which are punishable with either Penalty or Penalty or imprisonment i.e. where it is at discretion of the court to impose penalty or imprisonment, are compoundable under section 621A.

In       other     words     offence     which      is      specifically      punishable      with imprisonment only or imprisonment plus fine is non-compoundable.

PENALTY: –

Penalty, which may be imposed under the order of compounding by the CLB or RD shall not exceed the maximum amount of fine which may be imposed for commission of that offence.

Means if the maximum fine for an offence is 10 times of basic fees, then the penalty shall not exceed the 10 times of basic fees.

The fine imposed under the order of Compounding is considered as additional fees and payable under section 611 (2) and not regarded as penalty. This has a significant implication for qualifications and disqualifications of Directorship.

EFFECTS OF COMPOUNDING:

>   Once the offence is compounded, no further prosecution shall be initiated either by registrar or shareholder or any other person in respect of that offence

> Once the offence is compounded, the intimation of compounding needs to be given to the Registrar within period of seven days from the day on which the offence is so compounded.

PROCESS FOR COMPOUNDING:

1. Preparation of Application for Compounding– A petition is required to be prepared in form no. 1 of Companies (court) Rules, 1959 . Following documents are required to be attached with petition:-

>   Board resolution authorizing director for filing petition.

> Affidavits duly notarized.

> Power of attorney / Memorandum of Appearance

>    Sometimes Copies of 3 years attested financial statements

> Copy of agreement (if any)

The complete set for petition is to be prepared in Duplicate:

> One for presenting in Company Law Board/Regional Director

> One as an acknowledgment and for our records

2. Filing of Form with ROC:

E-form No. GNL-1 is required to be filed with Registrar of Companies:

Attachments of GNL- 1:

  • Detailed application is required to be attached in all the cases of filing.
  • Affidavit duly notarized.
  • Power of Attorney/ Memorandum of Appearance
  • Copy of notice received from ROC or any other competent authority

3. Filing of Physical Copy of Application

After Submission of  E-form No. GNL-1 physical application can be made to the CLB or RD as the case may be for compounding of offence.

4. Order of Compounding-

Once the order of Compounding is passed, the same needs to be filed with the registrar of companies in e-form INC-28.

(Author – CS Divesh Goyal, ACS is a Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)

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(Republished with amendments)

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75 Comments

  1. Bal Kishan Sikaria says:

    A person was a Director in a company for three years and he resign from Directorship about 1 year. He want to surrender the DIN as he do not intend to become a director in any company in future. Kindly advise how to surrender.

  2. kiran kumar says:

    Hi,
    As above said to surrender multiple din one must fill the form DIR 5 and where due non update of DIR3 kyc now both DIN is been deactivated since its deactivated we will not be able to fill DIR5 form so please advise or let me know solution for surrendering for this type of case hope u understand the issue.

  3. Sankarankutty says:

    A person was a Director in a company for three months and he ceased tobe a Director. He want to surrender the DIN as he do not intend to become a director in any company in future. Kindly advise how to surrender.

    1. Bal Kishan Sikaria says:

      A person was a Director in a company for three Years and he resign from the co. Today he can’t hold any directorship in any co. He want to surrender the DIN as he do not intend to become a director in any company in future. Kindly advise how to surrender.

  4. sk menon says:

    I am a holder of PAN based DIN and become a Director in one company and ceased to be a director of that company. The status of the company is “strike off”.
    I am a Director in other company with another DIN, which is not a PAN based DIN and still filing returns with that DIN. Which DIN I have to surrender and how. Kindly advise. Draft of the affidavit and Board Resolution may be sent to me.

  5. Ajay Kabra says:

    Dear Sir,

    My query is that Form RD-1 requires CIN of the Company so do we have to enter the CIN of the Company in which the Director has been appointed with the Original DIN (DIN 1st allotted and which is used). And kindly also share the format of Affidavit and Board Resolution. It would be of great help.

  6. Rahul agarwal says:

    on 12.01.2016 I have made payment for DIR3 which was unsuccessful but the amount was debited from bank.
    As it was showing as not paid and refund will be made within 48 hrs I again filled form DIN3 and it was a successful transaction and I have been allotted DIN
    On 13.01.2016 I received a mail from MCA confirming DIN approval which was showing as not paid due to transaction error on 12.01.2016.
    Now, I want to surrender one DIN.
    Kindly give your suggestion.

  7. Pragyesh Sngh says:

    Provisional DIN normally get Lapsed after certain period and such Lapsed DIN even cant be processed for any purpose, but surprisingly if you enter the same details on Form DIR 12, this given details of the Applicants with father name address and date of birth. when we try to collect the details of the DIN from pending DIN, it shows lapsed DIN.

    As per my view, Lapsed DIN don’t need any action and you may simply proceed without worries..

  8. Kajal Agrawal says:

    Hello Sir,

    If the director has two DIN, out of which one DIN has never be utilised and the other DIN which has been utilised in a company has filed form FTE for its closure last year. So, what would be the procedure for the same? Kindly tell me form RD-1 is required to be file or not?

  9. Pritesh says:

    Thank you for the information. It is very helpful. I would like to ask what is the recourse to be taken in case the director has never been appointed by any company / in the process of being appointed by a company which still under incorporation. Form RD-1 specifically requires, attachment of Board Resolution.

  10. CALP LLP says:

    Thank you for sharing the post. My question is whether it is necessary to attach a board resolution, if yes then of which company as an individual is a Director in number of Companies.

    Kindly inbox me the format of affidavit and board resolution.

  11. Rakesh Tak says:

    Dear Sir

    I agree with the process for cancellation of DIR …

    But the question is that

    if the holder of DIR is never appointed in any company
    than how we can file FORM RD-1 without having CIN number….

    kindly advise me how to proceed in such kind of situation…

  12. Balamurugan says:

    Suppose if a person is having two DIN’s. But he is not director in any company. Then how he can file the RD-1, because RD-1 is to be compulsorily filled with CIN. Also send me the draft board resolution and compounding application format to kkfcs5@gmail.com

  13. Anshuman Jain says:

    Sir
    If the director had multiple din before companies act 2013 came into force then which act provisions will now be applied to him. i. e 1956 or 2013 Act.

  14. Abhishek Adlakha says:

    Dear Sir

    Thank you for such a good post. It would be great if u can share format of Affidavit & Board Resolution to be attached in RD-1.

    Rgds

  15. Manoharan says:

    Dear Sir,

    I have some question in mind, please clarify

    Sl. No. (b) of the undertaking (DIR 5)state as under:-
    “I have never been appointed as director in any company and the DIN has never been used for filing of any document with any authority”

    In case of any person having multiple DIN and he is a Director in any company, how can he declare the above declaration. If do so, it will be a false statement.

    RD-1 is CIN based, how can an individual file this form?

    Thanks in advance
    With Warm Regards
    Manohar

  16. Neelima Jain says:

    Dear Sir

    Thank you for this post. One client has two DINs from 2007. he has to surrender one and he has got show cause notice from MCA. In this matter I wanted to know the meaning of the words “Rs. 500 for every day after the first during which the contravention continues”.

    we want to file compounding application but first I have to understand what will be the penalty? Whether it will be continued from 2007?

    Pl. guide and pl. share format of Affidavit and board resolution. My mailid is neelima_jain580@yahoo.com

  17. Gaurav says:

    Dear Sir,

    One of my client has deceased, form DIR-12 has been filed for cessation of directorship, now her legal heir wants to surrender DIN. Please share format of affidavit, board resolution. Please also confirm that legal heir can sign application in DIR-5, affidavit and form RD-1.

  18. Rajesh says:

    Sir my one party is having two DIN both the DIN is issued in May 2014 out of which he used second DIN for any requirement and we have received notice for having two DIN , so sir after filing DIR – 5 , whether it is still need to do the process of compounding?

  19. manoj says:

    Dear Sir
    Thank you for the post, I would be great help if u can also share format of Affidavit and Board resolution to be attached in form RD-1

  20. Gagan says:

    My one client has two DIN .She has used one DIN in one Company upto 2007-2008. 2nd DIN has never been used by her and now she has not using any one. She has received notice from MCA.
    Please tell me whether compounding is required in this case and if she sumbit RD-1,DIR-5 physically whether it is enough.
    Kindly send me format of affidavit and Board Resolution

  21. Jyoti says:

    Dear Sir,

    Thank you for the post, I would be great help if u can also share format of Affidavit and Board resolution to be attached in form RD-1 .

    Regards,
    Jyoti

  22. MB Rami Reddy says:

    thans for ur adivces. i urgently Require draft of Affidavit of surrender of DIN + Board Resolution. please send them to my e-mail above mentioned.

  23. AVINASH LALWANI says:

    Dear Sir,

    Kindly share the format of affidavit and Board Resolution for Surrender of DIN in the above mention email id.

  24. sonia hans says:

    My one client has two DIN .She has used one DIN in one Company upto 10/02/2011. 2nd DIN has never been used by her and now she has not using any one. She has received notice from MCA.

    Please tell me whether compounding is required in this case and if she sumbit RD-1,DIR-5 physically whether it is enough.

    Kindly send me format of affidavit and Board Resolution

  25. CS Abhishek says:

    Sir, if a person was allotted one DIN No. and one DPIN no. under old system of separate DPIN No. for LLP. And MCA System has not merged his both DIN numbers, still the person need to go for Compounding..? Because actually he has taken 2 DINs under the provisions of LLP act. Kindly advise what next action we should take in such situation.
    Thanks in advance

  26. Dev says:

    In case individual is not a director in any of the company in that case Dir 5 can be physically submitted to RD with reply of show cause notice.

    There is no specific format for BR.

  27. BABA says:

    Dear Sir
    Thank you for the post, I would be great help if u can also share format of Affidavit and Board resolution to be attached in form RD-1

  28. Mangesh More says:

    Dear Sir,
    This is an addendum to my earlier comment on your post regarding surrender of DIN.
    Sir, as you mentioned DIR-5 is an attachment of RD-1 but, RD-1 requires CIN of Company. If Director doesn’t use that DIN anywhere, then how come we can upload RD-1 form with the MCA?

    Please advice and do the needful.

    Thanking You.

  29. Mangesh More says:

    Dear Sir,
    Thanks a lot for sharing this information.

    As per your article attachements of RD-1 is DIR-S. Can you please explain that where we can find that form DIR-s.

  30. Jagdish says:

    Dear Sir,

    Thanks for the useful info. Pls. help us by sharing Format of Affidavit & Board Resolution to be attached with form RD-1.

    Great Day !

  31. Subramanian says:

    Dear Sir,

    Thank u very much for the post, please share the format of Affidavit to be attached in form RD-1 at the earliest which will be most helpful

  32. Gaurav says:

    Dear Sir
    Thank you for the post, I would be great help if u can also share format of Affidavit and Board resolution to be attached in form RD-1 .

  33. Kinjal says:

    Dear Sir

    Thank you for the post, I would be great help if u can also share format of Affidavit and Board resolution to be attached in form RD-1

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