DIR-3 KYC: Mandatory compliance for DIN holders

(An Analysis Of MCA Circulars, Notification, Laws And Regulation, E-Forms Etc.)

Attention:

MCA (Ministry of Corporate Affairs) has recently issued Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019 and The Companies (Registration Offices and Fees) Fourth Amendment Rules, 2019 on 25th July 2019 on "DIR-3 KYC".

As per the notification issued on 25th July 2019:

a. E-Form DIR-3 KYC is to be filed by an individual who holds DIN and is filing his KYC details for the first time or by the DIN holder who has already filed his KYC once in e-form DIR-3 KYC but wants to update his details.

b. Web service DIR-3-KYC-WEB is to be used by the DIN holder who has submitted DIR-3 KYC e-form in the previous financial year and no update is required in his details.

c. Due date for filing the KYC form is 30th September, 2019.

d. Update on Filing the Form: Per day you can only do 10 Web- KYC from one login. Either wait for next day or use another Login.

About Web based DIR-3 KYC:

• Filed by the DIN Holder:

a. Who has submitted DIR-3 KYC e-form in the previous financial year and
b. No update is required in his details.

• How to file:

- Go to www.mca.gov.in
- LOG IN TO YOUR MCA ACCOUNT
- CLICK ON MCA SERVICES TAB
- NAVIGATE TO - DIN SERVICES - *DIR 3 KYC WEB*
- Enter DIN NO. AND SUBMIT
- GENERATE OTP's for EMAIL ID & MOBILE NO.
- ENTER THE OTP'S IN THE RESPECTIVE FIELDS
- CONFIRM THE DETAILS OF PERSON APPEARING ON SCREEN
- CLICK SUBMIT
- GENERATE A ZERO RUPEE CHALLAN
- CHECK SRN STATUS FOR CONFIRMING THE KYC VERIFICATION.

ABOUT e- FORM DIR-3 KYC:

• FLED BY AN INDIVIDUAL:

a. who holds DIN and
b. filing his KYC details for the first time or
c. by the DIN holder who has already filed his KYC once in e-form DIR-3 KYC but wants to update his details.

Analysis of MCA Rules and Circulars:

I. Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019

Applicable : with effect from 25th July, 2019

Key Highlights:

Changes made under Rule 11(2) and Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014 (Given below under the heading “Governing Laws & Regulations”).

Link: http://www.mca.gov.in/Ministry/pdf/ThirdAmendRules_25072019.pdf

II. The Companies (Registration Offices and Fees) Fourth Amendment Rules, 2019.

Applicable : with effect from 25th July, 2019

Key Highlights:

• Fee payable till the 30th September of every Financial Year in respect of E-form DIR-3 KYC or DIR – 3 KYC – WEB through web services, as the case may be, for the immediate preceding Financial Year.

• Fee payable in delayed cases is Rs. INR 5000/-

• Fee payable if the individual failed to file e-form DIR-3 KYC or DIR-3 KYC-WEB through web service, as the case may be, for the immediate previous financial -Year (in delayed case) is . INR 5000/-.

Link: http://www.mca.gov.in/Ministry/pdf/FourthAmedRules_25072019.pdf

III. MCA Notification dated 13.04.2019:

DIR 3 KYC is Annual Compliance: DIN holders are required to file the DIR-3 KYC form every year, so that they are aware of and confirm the data & information as available in the MCA21 system.

http://www.mca.gov.in/Ministry/pdf/DIR3KYCcompleteMessage_13042019.pdf

IV. As per MCA General Circular NO.07-2019 on DIR-3 KYC. dt. 27.06.2019

1) every person who has already filed DIR-3 KYC will only be required to complete his/her KYC through a simple web-based verification service, with pre-filled data based on the records in the registry, for ease of verification by the person concerned.

2) in case a person wishes to update his mobile no. or e-mail address, he would be required to file e-form DIR-3 KYC, as this facility of updation is not being proposed in the web-based service.

3) in case of updation in any other personal detail, E-form DIR-6 may be filed for updation of the same before completion of KYC through the Web-Based Service.

Link for the same: http://www.mca.gov.in/Ministry/pdf/GeneralCircular_27062019.pdf

Overview:

Ministry of Corporate Affairs has issued circular dated 05th July, 2018 on Companies (Appointment and Qualification of Directors) fourth Amendment Rules, 2018 to conduct KYC for all the directors of companies annually through a new E-form DIR-3 KYC. These rules has came into effect from 10th July, 2018.

Link of the Circular: http://icmai.in/upload/Institute/Updates/MCA_12072018.pdf

Governing Laws & Regulations:

Rule 12A and Rule 11(2) and 11(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

According to these rules:

Rule 12A: "Every individual 5 who holds a Director Identification Number (DIN) as on 31st March of a financial year as per these rules shall, submit e-form DIR-3-KYC for the said financial year to the Central Government on or before 30th, September of immediate next financial year."

where an individual who has already submitted e-form DIR-3 KYC in relation to any previous financial year, submits web-form DIR-3 KYC-WEB through the web service in relation to any subsequent financial year it shall be deemed to be compliance of the provisions of this rule for the said financial year:

Provided also that in case an individual desires to update his personal mobile number or the e-mail address, as the case may be, he shall update the same by submitting e-form DIR-3 KYC only.

Rule 11(2):

"The Central Government or Regional Director (Northern Region), or any officer authorized by the Central Government or Regional Director (Northern Region) shall, deactivate the Director Identification Number (DIN), of an individual who does not intimate his particulars in e-form DIR-3-KYC 3 or the web service DIR-3-KYC-WEB as the case may be within stipulated time in accordance with rule 12A."

Rule 11(3)

The de-activated DIN shall be re-activated only after e-form DIR-3-KYC 3 or the web service DIR-3-KYC-WEB as the case may be is filed along with fee as prescribed under Companies (Registration Offices and Fees) Rules, 2014.

Who needs to file DIR-3 KYC?

1. Every Director having DIN or who has been allotted DIN and whose DIN is in 'Approved' status.

2. Directors having disqualified DIN, also have to comply with the aforesaid requirement.

For Financial year 2019-20 onwards - Every Director who has been allotted DIN on or before the end of the financial year, and whose DIN status is 'Approved’, would be mandatorily required to file form DIR-3 KYC before 30th April of the immediately next financial year.

Fee for filing e-form DIR-3 KYC or web-form DIR-3 KYC-WEB through the web service under Rule 12A of Companies (Appointment and Qualification of Directors) Rules, 2014:

• As provided in Companies (Registration Offices and Fees) Rules, 2014.

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 due to non-filing of DIR-3 KYC' a fee of Rs.5000 (Rupees Five Thousand Only) shall be payable.

Documents to us to file your DIR-3 KYC.

- Self attested copy of PAN - Mandatory
- Self attested copy of AADHAAR ,
- Self attested copy of Passport
- Self attested copy of Driver's Licence (if you have)
- Mobile Number (linked with Aadhaar)
- Email ID (Personal)
- Statement, Electricity bill/ Mobile/Telephone bill - if you have
- Digital Signature Certificate (DSC) is mandatory

Consequences of Non-Filing of DIR - 3 KYC

a. If a DIN Holder failed to file DIR 3 KYC on due date the he /she will have to pay Rs. 5,000 as filing fee as penalty.

b. In addition to the above penalty, any wrong information provided in the form will also be liable for penalty under Section 448 and 449 of the Companies Act, 2013 and relevant provisions of the Indian Penal Code 1860.

c. Further, a deactivated DIN means a person cannot act as a Director while his DIN is deactivated and any act done by him/her will be invalid and which might attract various penalties under Companies Act, 2013.

Important Questions on Filing of DIR-3 KYC

1. Whether multiple filing of form DIR-3 KYC is allowed?

System will not allow multiple filing of form DIR-3 KYC for an applicant. In case KYC is already filed for a DIN, and such DIN is entered again, system throws an error that the form is already filed.

2. Whether non-resident directors can provide Indian mobile numbers?

In case the DIN holder is a resident of India, the address must be an address in India and mobile number must be an Indian mobile number. In case DIN holder is non-resident, foreign address and foreign number shall only be allowed.

3. In case of having multiple DINs and have not filed DIR-3 KYC for any of the DINs. and wants to surrender the DIN but while Filling the form DIR-3 KYC, the DIN is not getting prefilled?

In case you have multiple DINs then you need to retain the oldest DIN and surrender all the latest DINs by filing DIR -5 e-form.