Compliance-DIR-3 KYC

Overview

A Director Identification Number (DIN) is an exclusive identification number. It is designated to individuals seeking to assume or currently holding a director position within a corporate entity. Initially, obtaining a DIN involved submitting an application through eForm DIR-3. This was designed as a one-time procedure for those aspiring to serve as directors in one or more companies.

What is DIR-3KYC?

Form DIR-3 KYC is a regulatory mandate established by the Ministry of Corporate Affairs (MCA) in India, aimed at ensuring the currency and precision of company directors' information. The primary objective of this form is to authenticate the personal particulars of directors and uphold transparency in the realm of corporate governance.

Benefit

Maintaining an Active Director Identification Number (DIN) Status: Ensuring the punctual submission of Form DIR-3-KYC is crucial to preserve the "Active" status of a Director's DIN. Failure to do so may result in deactivation by the Ministry of Corporate Affairs (MCA). An individual with an Active DIN can assume directorial roles in new companies or serve as a designated partner in a new Limited Liability Partnership (LLP) at any time. They can utilize their Active DIN to sign various forms.

Keeping Director Information Current in the MCA Database: Regularly submitting Form DIR-3-KYC is the key to both keeping a director's information updated and making alterations to their details in the MCA's database.

Avoiding Hefty Penalties: If a Director's DIN is deactivated due to non-compliance with DIR-3-KYC filing, it can be reactivated by paying a penalty of Rs. 5000 per Director. Timely submission of this form is a prudent approach to circumvent substantial financial penalties.

Tax & Process

When a director's DIN is marked as "Deactivated" by the Ministry of Corporate Affairs (MCA) for the reason of failing to file Form DIR3-KYC then it can have the following consequences:

Future Business Ventures: The affected Director or Designated Partner is barred from incorporating new Companies or Limited Liability Partnerships (LLPs) until their DIN is reactivated.

Compliance Restrictions: The individual cannot employ their DIN for any Company or LLP-related regulatory obligations, including filing ROC Returns, implementing changes in directors, appointing auditors, and more. Non-compliance may lead to the potential dissolution of the Company or LLP.

Fundraising and Loans: Deactivated DIN status can adversely affect the Company or LLP's fundraising efforts and loan proposals, potentially hampering its financial prospects.

Financial Penalty: Filing Form DIR-3-KYC after the stipulated period incurs a fine of Rs. 5000 imposed by the MCA.

Documents Required

• Scanned copy of PAN card.
• Scanned copy of Passport (Compulsory for Foreign Citizens and Indian Citizens, if available).
• Scanned copy of Aadhaar card (Compulsory for Indian Citizens).
• Proof of permanent and current address (Select One from the Following):
• Driving License
• Voter ID (Election card)
• Passport
• Aadhaar card
• Ration card
• Electricity bill
• Telephone bill.

For Indian Applicants, the provided documents must not be older than 2 months from the date of form submission. For foreign applicants, address proof should not be dated more than 1 year from the date of form submission.

Procedure

Downloading the Form: Start by downloading the required form from the MCA website.

Providing DIN Details: Individuals or Directors must enter their DIN in the KYC form, and the status should be 'Approved.' Directors whose DINs were deactivated due to late KYC filing can still submit the form by paying the necessary late filing fees.

Filling the DIR-3 KYC Form:

Name and Relevant Credentials: Enter the first and last names of the applicant and their father, ensuring they match the PAN details. Acronyms, short forms, and single alphabets are not accepted.

Nationality: Declare your nationality, with foreign nationals using the nationality as mentioned in their passport.

Age Declaration: Input the date of birth in DD/MM/YYYY format, with the applicant being a minimum of 18 years old.

Address: Provide the permanent residential address, which should align with the attached proof of address. If the present residential address is different, it should also be entered.

Verification of PAN: Declare your Permanent Account Number (PAN) and click on the 'Verify income-tax PAN' button for validation. Ensure that the PAN in the form matches the PAN in the DSC for successful validation. For foreign nationals without a PAN, the name in the form should match the name in the DSC.

Updating Contact Details and OTP Verification: Enter your mobile number and email address for OTP verification. Different country codes are allowed for non-residents of India.

Attachments: Upload the following documents, duly attested:

• Proof of Permanent Address.
• Conditional attachments.
• Copy of Aadhaar Card.
• Copy of Passport.
• Proof of Present Address.
• Optionally attached documents should be digitally signed by the applicant.
• e-Form Certification:

Digitally sign the eForm with the endorsement of a practicing Chartered Accountant, Cost Accountant, or Company Secretary. Enter their details and attach their digital signature.

Submission: After a careful review, click on the 'Submit' button.

Process after Form Submission:

SRN Generation: Following a successful submission, an SRN (Service Request Number) will be generated for future correspondence with the MCA.

Email Confirmation: An email confirming the receipt of the form will be sent to the applicant's provided email address. Once this approval email is received, the eForm DIR-3 KYC submission process is complete.

FAQ's