Requirement of Updating DIN every year

About

Director identification number (DIN) refers to a unique identification number that is given to a person desiring to be a director or an existing director. Through DIN, details of the directors are maintained in a database .It is an 8-digit unique identification number and has lifetime validity.

The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, all the existing and intending Directors have to obtain DIN within the prescribed time-frame as notified.

In this digitised era, application in eForm DIR-3 was sufficient to obtain DIN. For any individual who wants to be a director in one or more companies, this was only a one time process. However, now with the move of the MCA to update its registry, all directors with a DIN will have to update their KYC details annually in eForm DIR-3 KYC. This annual KYC for all DIN holders has been made mandatory by the MCA w.e.f. 10th July 2018 by including Rule 12A to Company registration Appointment and Qualifications of Directors) Rules, 2014. This compliance is mandatory even for Disqualified Directors. MCA will automatically deactivate those DINs for which the form is not filed

This process will regularly update data in the reports of the Government in respect of each individual who is holding the DIN and also deactivate the DIN’s which are not being used and where renewed data is not available. Just like online company registration, filing of DIR 3 KYC is also an online process.

Consequences of not filing eForm DIR-3 KYC

There are several consequences of non filing of the form which we’ll talk about in the following.

If the DIN holder does not file his annual KYC within the due date of each financial year, such DIN shall be marked as 'Deactivated due to non-filing of DIR-3 KYC' and shall remain in such Deactivated status until KYC is done with a fee of Rs. 5000 as ROC Fees as prescribed under Companies (Registration Offices and Fees) rules.

DIN of the Individual who has failed to file the KYC form will be temporarily deactivated which will result in the Company not being able to file any forms containing DIN of the Individual. Companies shall also not be able to file any annual form like AOC-4 and MGT-7 with ROC and any other form with DSC of the director whose DIN has been deactivated. Further, Till the time he can't be appointed as a director in any new Company or LLP which has got their company registration and can’t resign from any Company or LLP.

Also,there are many provisions of the Companies Act, 2013 and LLP Act, 2008 that provide for the requirement of Directors or as Designated partner to sign documents under the respective Act with DIN. Hence, the company shall not be able to get any dox signed from such Director due to the deactivation of his/her DIN.

MCA will reinstate the DIN upon the filing of KYC.

Documents Required

- PAN of Director

- Proof of permanent address (Latest Bank Statement/ Latest Mobile or Electricity Bill)

- Copy of Aadhaar Card (Mandatory for Indian Director)

- Copy of passport if they have the same

- Mobile No  & Email (for OTP Verification)

- Digital Signature of Director

- A declaration has to be provided by the applicant duly attested by practising professionals.

Cessation

After company registration, all the Directors holding DIN must annually update their DIN as failure of this will cause hindrance in the smooth functioning of the firm after company registration and a penalty of Rs. 5000. Directors should always be compliant right from the time of company registration.