DIRECTOR IDENTIFICATION NUMBER UNDER COMPANIES ACT, 2013 AND RULES MADE THERE UNDER

[Mr. M. GOVINDARAJAN]

Director Identification Number

Sections 153 to 159 of the Companies Act, 2013 (‘Act’ for short) deal with the Director Identification Number (‘DIN’ for short).  Rule 2(d) of the Companies (Appointment and Qualification of Directors) Rules, 2014 defines DIN as an identification number allotted by the Central Government to any individual, intending to be appointed as Director or to any existing director of a company for the purposes of identifying as a director of a company.  The DIN obtained by the individuals prior to the notification of these rules shall be the DIN for the purpose of Companies Act, 2013.  Further the DIN includes the Designated Partnership Identification Number under Section 7 of the Limited Liability Partnership, 2008 and the rules made there under.

Application for DIN

Section 153 of the Act provides that every individual intending to be appointed as director of a company shall make an application for allotment of DIN to the Central Government.  Rule 9 provides that the application for allotment of DIN should be filed electronically in Form No. DIR-3 along with the fees prescribed.  The Central Government provides an electronic system to facilitate submission of application for the allotment of DIN through the portal on the web site of the Ministry of Corporate Affairs.

The applicant shall download the form DIR-3 from the portal.   The applicant shall fill the required particulars sought therein and sign the form after attaching the copies of the following documents after scanning and upload the same electronically:

• Photograph;
• Proof of identity;
• Proof of residence;
• Verification by the applicant for allotment of DIN in Form – DIR 4; and
• Specimen signature duly verified.

The Form DIR-3 shall be signed and submitted electronically by using his or her digital signature certificate and duly verified digitally by-

• A Chartered Accountant in practice or a Company Secretary in practice or a Cost Accountant in practice; or
• A Company Secretary in full time employment of the company or by the Managing Director or Director of the company in which the applicant is to be appointed as Director.

Allotment of DIN

      The following is the procedure in allotment of DIN:

• On the submission of Form – DIR 3, an application number shall be generated by the system automatically;
• The Central Government shall process the application for DIN;
• The Central Government shall, within one month from the receipt of the application allot a DIN to the applicant;
• If the Central Government, on examination of the application, finds to be defective or incomplete in any respect, it shall give intimation of such defect or incompleteness to the applicant, by placing it on the website and by email, directing the applicant to rectify such defects or incompleteness by resubmitting the application within a period of 15 days of such placing on the website and email;
• If the Central Government decides on the approval of the application shall communicate the same to the applicant along with the DIN allotted;
• If the Central Government rejects the application of DIN it shall-

• Direct the applicant to file fresh application with complete and correct information, where the defect has been rectified partially or the information given is still found to be defective;
• Treat and label such application as invalid in the electronic record in the case of defects are not removed within the given time; and
• Inform the applicant either by way of letter by post or electronically or in any other mode;

• In case of rejection or invalidation of the application, the fee paid shall not be refunded or adjusted with any other application;
• The DIN allotted to the director is valid for the life time and the same shall not be allotted to any other person.

Director to intimate DIN

Section 156 of the Act provides that every existing director shall, within one month of the receipt of DIN from the Central Government, intimate his DIN to the company or all companies wherein he is a director.

Rule 10A provided that every director, functioning as a director in one or more companies on or before the 30th June, 2007 and who has not yet intimated his DIN to such company or companies shall, within one month of the receipt of DIN from the Central Government, intimate his DIN wherein he is a director as per form DIR-3B.

Obligation of company

Section 157 provides that every company shall, within 15 days of the receipt of intimation of DIN from the director, furnish the DIN of all the directors to the Registrar or any other officer or authority as may be specified by the Central Government with such fees  or with additional fees prescribed within the time specified under Section 403 and every such intimation shall be furnished in such form and manner as may be prescribed.

Obligation to indicate DIN

Section 158 provides that every person or company, while furnishing any return, information or particulars as are required to be furnished under the Act, shall mention the DIN in such return, information or particulars in case of such return, information or particulars relate to the director or contain any reference of any director.

Intimation of changes of particulars in DIN

Rule 12 provides that every individual who has been allotted a DIN shall, in the event of any change in his particulars as stated in Form DIR 3 intimate such change(s) to the Central Government within a period of 30 days of such changes in Form DIR – 6 in the following manner:

• The applicant shall download the Form DIR 6 from the portal;
• He shall fill in the form the relevant changes, verify the form and attach duly scanned copy of the proof of the changed particulars and  submit electronically;
• The form shall be signed by a Chartered Accountant in practice or a Company Secretary in practice or a Cost Accountant in practice;
• The applicant shall submit the Form DIR 6;
• The Central Government shall verify such changes and incorporate the changes and inform the applicant by way of letter by post or electronically or in any other mode confirming the effect of such change in the electronic data base maintained by the Ministry;
• The DIN cell of the Ministry shall also intimate the changes in the particulars submitted by the Director to the concerned Registrar(s) under whose jurisdiction the company(s) in which  such individual is a director is situated;
• The concerned individual also shall intimate the changes to the company(s) in which such individual is a director within 15 days of such change.

Cancellation/surrender/deactivation of DIN

Rule 11 provides that the Central Government or Regional Director (Northern Region), Noida or any officer authorized by the Regional Director may, upon being satisfied on verification of particulars or documentary proof attached with the application received from any person, cancel or deactivate the DIN in the following circumstances:

• The DIN is found to be duplicated in respect of the same person provided the data to both DIN shall be merged with the validity retained number;
• The DIN was obtained in a wrongful manner or by fraudulent means; before cancellation the concerned person shall be given opportunity of being heard; (the term ‘wrongful manner’ means if the DIN is obtained on the strength of documents which are not legally valid or incomplete documents are furnished or on suppression of material information or on the basis of wrong certification or by making misleading or false information or by misrepresentation.   The term ‘fraudulent means’ if the DIN is obtained with the intent to decide any other person or any authority including the Central Government.)
• Of the death of the concerned individual;
• The concerned person has been declared as a person of unsound mind by a competent court;
• On an application made in Form – DIR 5 by the DIN holder to surrender the DIN along with the declaration that he has never been appointed as director in any company and the said DIN has never been used for filing of any document with any authority, the Central Government may deactivate such DIN.  Before deactivation the Central Government shall verify e-records.

Punishment for contravention

Section 159 provides that if any individual or director of a company, contravenes any of the provisions of Section 155 and Section 156 such individual or director of the company shall be punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to ₹ 50,000/- and where the contravention is continuing one, with a further fine which may extend to ₹ 500/- for every day after the first during which the contravention continues.

If a company fails to furnish DIN before the expiry of the period specified with additional fee, under Section 157 the company shall be punishable with fine which shall not be less than ₹ 25,000/- but which may extend to ₹ 1,00,000/- and every officer of the company who is in default shall be punishable with fine which shall not be less than ₹ 25,000/- but which may extend to ₹ 1,00,000/-.