Learn all about DIR- 3 KYC (Introduced in 2018)

Starting your own business is a long cherished dream and becoming a Director is the most honourable position. As you all know that to start a company in India it is important to get the company registration done with the Registrar of Companies and need to follow the guidelines laid down by the Ministry of Corporate Affairs.

Suddenly there was a bout of confusion for all the Directors of the company by receiving messages from the Ministry of Corporate Affairs to file the DIR- 3 KYC before the due date which was 15th September 2018 to carry on with your esteemed position as a Director and keep the DIN status Active.

So all the Chartered Accountants, Company Secretary firms were activated with this news and were required to support their respected clients seeking for the details and how to go about it.

As we all are aware that the Ministry of Corporate Affairs makes amendments and frames rules as per the Companies Act 2013, DIR- 3 KYC was also introduced in the year 2018. In simple terms, I would like to explain all about DIR- 3 KYC.

DIR- 3 KYC is a simple form available on the Ministry of Corporate Affairs portal that needs to be filled by all the Directors who are allotted a Director Identification Number (DIN) on or before 31st March 2018. Also the status of the DIN must be ‘Approved’.

Then those who have been allotted the DIN number from 1st April 2018 need to file their DIR- 3 KYC for the financial year 2019-2020 with the ‘Approved’ DIN status.

All the Directors who are to file their DIR- 3 KYC for the Financial year 2019 – 2020 need to be be aware that to file the DIR- 3 KYC it is free of cost, but if your DIN is in the ‘Deactive’ status then you need to pay a minimal fee of Rs.500/- and, after the due date there is a huge amount of Rs.5000/- charged to file the DIR- 3 KYC.

Who needs to file the DIR- 3 KYC? (DIN acquired before 31st March 2018)

  • All the existing Directors of the Company
  • Directors whose DIN is in Deactive status
  • Directors though disqualified need to file as they would be allotted a DIN number which is in Approved status.

What are the documents and details required?

  • PAN card copy
  • Name as per the PAN Database
  • Father’s name as per PAN Database
  • Aadhar copy
  • Passport/ Voter ID/ Driving license copy
  • Director Mobile number
  • Director Email ID

Pre-requisites for filing the DIR- 3 KYC

  • The DIR- 3 KYC form needs to be duly certified by a practicing Chartered Accountant/ Company Secretary/ Certified Management Accountant
  • The form should be uploaded along with the Director’s Digital Signature Certificate (DSC)
  • For an Indian citizen, the PAN mentioned in DSC will be verified with the PAN in the DIR- 3 KYC form
  • For Foreign nationals, the name in the DSC and the name in the DIR – 3 KYC form should match
  • Non-Resident Indians (NRIs) must have a foreign address and mobile number
  • In case of multiple DIN numbers, the Director needs to retain the oldest DIN number and submit all the latest ones by filing DIR 5 Form.

So, all this exercise is done by the Government of India to make the business transparent and authentic, and anyone or everyone cannot be a Director. To be a Director in India, it is mandatory to have your documents done as per the Indian Government standards.

As per statics, it is estimated that more than 16.7 lakh DINs were disqualified due to non-filing of DIR-3 KYC.

If you are a start-up company or an existing company, there are certain limitations to run your company and if followed properly can run smoothly. Certain RoC Compliances are laid down as per the Companies Act 2013 by the MCA which will be scrutinized from the inception of the company.

From Company Registration to filing of your annual returns to taxation to Dir – 3 KYC and various other amendments visit the Ministry of Corporate Affairs portal or approach experts like Aavana Corporate Solutions to know and get advise on what all is required to run a business.

I have just shared my experiences of what my clients have faced. Hope this blog has given you an understanding of the importance of filing your DIR 3 KYC.

 

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