Directors KYC

Director KYC (DIR-3 KYC) – Filing Procedure with Due Dates & Documents

With the rising number of frauds committed by Indian firms, the people have shown concern about what India’s Ministry of Corporate Affairs is doing in this regard. To help eliminate such concerns, the MCA has introduced stricter norms for designated partners and Directors of limited liability partnerships and Indian companies. MCA has come up with Director KYC circular to tackle the issue. According to the circular if you are among such designated partners or Directors, then you just need to read on to know all about Director KYC (DIR-3 KYC).

Why People with a DIN or Director Identification Number Need to Fill E-Form DIR-3 KYC or Director KYC form?

According to the recent Director KYC, MCA Notification, directors or partners at a limited liability company need to follow the new disclosure requirements because:

  • The MCA wants to track the identities of Directors of LLPs and Indian Companies.
  • The MCA needs to ensure that there are more transparency and accountability for all Directors.
  • The MCA wants to put some measures into place that help in dealing with non-compliance at present or in the future.

What a Person with DIN or Director Identification Number Needs to Do?

According to the new disclosure requirement shared by the MCA, all the people who have a DIN need to update their KYC. It doesn’t matter whether the person currently holds any position as a Director or not. Even disqualified Directors need to fill this form.

The Dates

The effective date of this notification was 10th July 2018, and the Director KYC due date for compliance is 31st August 2018, for all Directors who had a DIN before 31st March 2018. The mandated date for people who got the DIN after 1st April 2018 is 30th April 2019. These mandated dates apply to all people having a DIN, be it Indian residents, NRIs and even foreign nationals.

What exactly is DIR-3 KYC and What Does It Include?

Director KYC DIR-3 (you can download the form here) as you might have guessed KYC stands for Know Your Client, and it is usually used by banks, government and investment banks to know some information about the clients. This information in case of DIR-3 KYC includes full name, father’s name, DIN, citizenship details, date of birth, nationality, gender, email address, mobile number, etc.

So what you need to do for Director KYC procedure? While filling up a DIR-3 KYC, you need to use a valid Digital Signature Certificate and provide the following documents:

  • A self-attested copy of PAN, Aadhar card, (linking Aadhaar and Pan Card is Important, read about it here) passport and present & permanent residential address.
  • Two optional documents are the driving license and a voter identity card number
  • Overseas Directors need to provide their passport details. Foreign nationals need to ensure that the supporting documents such as a copy of passport, a proof of residence are attested by the prescribed authority (a Foreign Public Notary or the Consulate of the Indian Embassy).
  • In cases where the documents are in another language than English or Hindi, they need to be translated into English by a professional translator who needs to provide some details like name, address, signature, and seal. If a foreign national is filling the E-Form DIR-3 KYC, he or she is allowed to get the translation done by a notary of the home country.

What Happens in Cases of Non-Compliance?

The DIN of a Director who fails to comply with the mandate by 31st August 2018 will be deactivated. So the Director KYC last date would be 31st August 2018. When that happens, a Director won’t be able to sign any compliance documents on behalf of an LLP or company which can lead to a problem for the company later on.

If a Director intends to re-activate the DIN, he or she will need to not only provide details in E-Form DIR-3 KYC but will also need to pay a fee (INR 5,000) according to Companies (Registration Offices and Fees) Rules, 2014.

Things to Remember About Filling E-Form DIR-3 KYC

  • If the Director’s name is not the same in the form, the DSC or the PAN card, the documents must be modified.
  • The form needs to be certified by a practicing professional such as a Company Secretary, Chartered Accountant or a Cost Accountant who is in whole-time practice.
  • The mobile number and email id mentioned in the form must not belong to an office; it must be the personal number and communication address of the Director.

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