Director KYC – All you need to know

In the recent past you must have read a lot about Directors of the company being disqualified due to non-filing of forms for balance sheet and annual return by the companies.

Carrying on its clean up drive against bogus companies and “just for records” directors, MCA has now launched its next weapon – KYC for directors.

What is the need for Director KYC?

The reason given by MCA is that it is updating its records and registry. In my view, this way MCA will know how many DINs are active.

DIN is Director’s Identification Number issued by the Ministry and every person who wants to become a director or is a director of a company needs to have DIN.

The same rule is applicable for partners of Limited Liability Partnerships (LLPs).

This KYC has to be done by:

1. Every director who is on board of a company or designated partner in an LLP.
2. Every person who has a DIN, even though s/he is currently not a director of a company or LLP.
3. Every disqualified director.

Note: The status of DIN should be ‘Approved’.

If you are falling in one of the categories mentioned above, you need to file eform DIR-3-KYC with MCA.

You are not required to file the form for financial year 2018-19 if you have been allotted DIN after 31st March 2018.

The form will have your particulars along with supporting documents to be attached. You have to digitally sign the form. So, make sure you have a valid DSC (Digital Signature) in Class-2. If the DSC has expired, renew the same before filing the form. Also, the DSC should be duly registered on MCA portal.

What is the due date for filing form DIR-3-KYC?

The due date for filing form for financial year 2018-19 is September 15, 2018. For Financial year 2019-20 onwards, every person who has been allotted DIN on or before the end of the financial year, and whose DIN status is ‘Approved’, has to file form DIR-3 KYC before 30th April of the immediately next financial year.

What is the fee for filing form DIR-3-KYC?

Form DIR-3 KYC, if filed within the due date of the respective financial year, no fee is payable. However, if filed after the due date, for DIN status ‘Deactivated’ a fee of Rs.5000 shall be payable.

Update: The due date for financial year 2018-19 has been extended till October 5, 2018 with fee of Rs. 500/-.

What will happen if the form is not filed within the due date?

After expiry of the due date, if DIR-3 KYC form has not been filed, MCA will mark such DIN as ‘Deactivated’ with reason as ‘Non-filing of DIR-3 KYC’.

After the due date, filing of DIR-3 KYC in respect of such deactivated DINs will be allowed only on payment of a specified fee. Any other action may also be taken by MCA.

Few important points to note

#1. Regarding particulars of the Director:

1. The name should be as mentioned in the PAN card.
2. If you have a passport, it is compulsory to mention the passport number.
3. If you are an Indian citizen, it is mandatory to mention PAN.
4. You need to have a personal mobile number and email ID which is unique to you only.

#2. Regarding supporting documents:

You need to attach:

1. Copy of Aadhaar card
2. Copy of permanent address
3. Copy of present address

Remember:

1. The documents should be in the name of Director only.
2. Every supporting document needs to be self attested by the Director.
3. If you have passport, then copy of passport is mandatory to be attached.
4. If you have Aadhaar card, it is mandatory to be attached for Indian citizens.
5. Aadhaar card, passport, election (voter identity) card, ration card, driving license, electricity bill or telephone bill can be attached as address proof.
6. The practicing CA / CS / CMA, who is hired to certify the form, should also certify the attachments made in the form.

#3. Regarding generation of OTP:

The details of email id and mobile number are verified by using OTP system. Different OTP will be sent on the mobile number and email id mentioned in the form. So make sure you have active and valid mobile number and email id. OTP is valid for 30 minutes.

#4. For foreign nationals or non-resident persons:

1. The name in the DSC affixed should match with the name entered in the form.
2. Foreign address and foreign number will only be allowed.
3. The supporting documents should be apostilled by the authority in foreign country.
4. It is mandatory to attached passport copy

If all the instructions are followed, the process is not as difficult as it sounds. Of course, the practicing professional you hire will also help you in filing this form.

Make sure that you file the correct information in the form as the form can be filed for a financial year only once.

Remember, that this form has to be filed every year. The due date for filing the form the year is approaching. Do not wait for last minute.

If you have any queries, you can write to me at kruti@cskruti.com.