A unique Identification Number known as DIN (Directors Identification Number) is allocated to individuals who aspire to become directors or are already directors or partners in an LLP (Limited Liability Partnership). To obtain a DIN, individuals need to file the e-form DIR-3.
Previously, prior to 2018, filing the DIR-3 form was a one-time requirement for individuals to become or continue as directors in a company. However, with an update in the MCA’s (Ministry of Corporate Affairs) registry, it has now become mandatory for all directors holding a DIN to submit their KYC (Know Your Customer) details annually through the e-form DIR-3 KYC.
Regardless of the DIN’s status, whether approved or disqualified, every director is obligated to file the DIR-3 KYC each year.
There are two types of DIR-3 KYC forms:
- DIR-3 e-form KYC: This form is filed for the first time when an individual becomes a director or when there are changes in the director’s details such as phone number, address, email, etc. Filing the DIR-3 e-form KYC requires a Digital Signature Certificate (DSC).
- DIR-3 Web-KYC: This form is filed by individuals who have already submitted DIR-3 KYC in the previous year and have no updates in their personal details such as phone number, address, email, etc.
The DIR-3 KYC process offers several benefits:
- Active DIN Status: By filing DIR-3 KYC, an individual ensures that their DIN remains active. Failure to comply with DIR-3 KYC requirements can result in the disqualification of the DIN, preventing the individual from serving as a director or partner in any Indian entity for the next five years.
- Penalty Avoidance: Failing to complete DIR-3 KYC by the specified due date (typically September 30) leads to a mandatory penalty of Rs. 5,000 imposed by the Ministry. By timely filing DIR-3 KYC, individuals can avoid incurring such penalties.
- Compliance with Regulatory Requirements: DIR-3 KYC is a regulatory requirement established by the Ministry of Corporate Affairs. By fulfilling this obligation annually, directors ensure compliance with the regulations and maintain good standing with the authorities.
- Updated Information: DIR-3 KYC allows directors to update their personal details, such as phone numbers, addresses, and email addresses, ensuring that accurate and up-to-date information is available in the official records.
- Enhanced Trust and Credibility: By regularly filing DIR-3 KYC, directors demonstrate their commitment to transparency and accountability. This contributes to building trust and credibility with stakeholders, including investors, shareholders, and business partners.
- Smooth Business Operations: Having an active DIN status and complying with regulatory requirements like DIR-3 KYC helps in the smooth functioning of business operations. It ensures that the company is led by qualified and compliant directors, which can positively impact its reputation and operations.
To complete the DIR-3 KYC process, you will need the following checklist of requirements:
- Email: A valid email address to receive communication and updates related to the KYC process.
- Phone number: A working phone number for contact purposes.
- PAN Card: A valid Permanent Account Number (PAN) Card issued by the Income Tax Department.
- Aadhar card (with mobile number updated): An Aadhaar card with the mobile number updated. Aadhaar is a unique identification number issued by the Unique Identification Authority of India (UIDAI).
- Address proof (Electricity bill/Bank statement): Documents serving as proof of address, such as an electricity bill or bank statement. These documents should contain your name and current residential address.
- Passport size photograph: A recent passport-size photograph of yourself.
- Digital Signature Certificate (DSC): A valid Digital Signature Certificate issued by a certified agency. This is mandatory for filing the initial DIR-3 KYC form (DIR-3 e-form KYC).
Please note that these are general requirements, and there may be additional documents or information requested depending on specific circumstances or changes in regulations.
Here is a simplified version of the registration and processing steps for DIR-3 KYC:
Step 1: Gather the required documents and information.
Step 2: Submit the documents and information to the appropriate authority or seek professional assistance.
Step 3: Verify your submission by entering the OTP sent to your mobile number or email.
Step 4: Once verified, you will receive confirmation of your DIR-3 KYC filing. Remember to keep a copy of the confirmation for your records.
Please note that it’s important to consult the official guidelines or seek professional advice to ensure compliance with the latest requirements and procedures for registering and processing DIR-3 KYC.
The key deliverables of the DIR-3 KYC process include:
- Filled e-form: The completed and duly filled DIR-3 KYC e-form, which contains all the required information and details about the director.
- Challan: A receipt or proof of payment of the applicable fee for filing the DIR-3 KYC. This fee is typically paid online through a designated payment gateway.
These deliverables serve as evidence of compliance with the DIR-3 KYC requirements and should be retained for record-keeping purposes.