DIR-3 KYC: Improved Transparency with OTP Authentication By CS Shiriti Kumari


 

Applicable Section & Rule:

eForm DIR-3 KYC is required to be filed pursuant to Rule 12A and Rule 11(2) and (3) of The Companies (Appointment and Qualification of Directors) Rules, 2014.

Rule 12A:

Every individual who has been allotted a Director Identification Number (DIN) as on 31st March of a financial year as per these rules shall submit e-form DIR-3-KYC to the Central Government on or before 30th April of immediate next financial year.

Provided that every individual who has already been allotted a Director Identification Number (DIN) as at 31st March 2018, shall submit eform DIR-3 KYC on or before 31st August 2018." 

Extended till Sept 15, 2018

Rule 11(2):

The Central Government or Regional Director (Northern Region), or any officer authorised 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 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 is filed along with fee 5000/- as prescribed under Companies (Registration Offices and Fees) Rules, 2014.

Read with Applicable Notification:

Notification dated 5th July 2018 has notified the “Companies (Appointment and Qualification of Directors) fourth Amendment Rules, 2018”

Effective date:

The effective date of Notification shall be10th July 2018 and Operational from 14th July (Form available for filing)

Applicability:

Who required to file the form DIR-3 KYC with MCA.

o   Indian Resident or

o   An NRI or

o   Foreign National


Why this KYC of Directors Required by MCA?

As part of updating its registry, MCA would be conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYC to be notified and deployed shortly. Accordingly, every Director who has been allotted DIN on or before 31st March 2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file form DIR-3 KYC on or before 31st August 2018. Extended till Sept 15, 2018 While filing the form, the Unique Personal Mobile Number and Personal Email ID would have to be mandatorily indicated and would be duly verified by One Time Password(OTP). The form should be filed by every Director using his own DSC and should be duly certified by a practising professional (CA/CS/CMA). Filing of DIR-3 KYC would be mandatory for Disqualified Directors also.

The Ministry of Corporate Affairs has amended the provisions of Companies (Appointment and Qualification of Directors) Rules, 2014 and notified the Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2018 which shall come into force from 10th July 2018. According to the amendments, the Ministry has prescribed the format of e-form DIR-3 KYC. The Central Government or Regional Director (Northern Region) or any officer authorised by the Central Government or Regional Director (Northern Region) shall be empowered to deactivate the Director Identification Number (DIN) of an individual who does not intimate his particulars in e-form DIR-3-KYC within the stipulated time. The de-activated DIN shall only be re-activated after e-form DIR-3-KYC is filed along with prescribed fee of Rupees 5,000/-.

After expiry of the due date by which the KYC form is to be filed, the MCA21 system will mark all approved DINs (allotted on or before 31st March 2018) against which DIR-3 KYC form has not been filed 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 shall be allowed upon payment of a specified fee only, without prejudice to any other action that may be taken.

KYC is an acronym for "Know Your Customer", a term commonly used for Customer Identification Process. Know Your Customer (KYC) norms are now mandatory for ALL who was allotted a DIN by or on 31st of March 2018 and whose DIN is in approved status and to make an application in eForm DIR-3 KYC.

Key Features:

  • E-Form Dir – 3 KYC also applicable to Partners/Designated Partners having approved DIPN;
  • If any Director/DP holding multiple DIN also required to file the eFORM DIR – 3 KYC, for each DIN on or before 31st March 2018, and having more than one DIN is always be restricted under Companies 2013, therefore proceed to surrender the one of such DIN as earliest possible;
  • Directors/DP either residents in Indian national or Non Residents or Foreign nationals, who are directors/ partners any Companies/LLP anywhere are required to file E-Form Dir – 3 KYC;
  • While filing DIR-3 KYC form, all stakeholders are requested to use PAN-based DSC in case of Indian National., DSC should contain PAN as specified in the form and in respect of foreign nationals, applicant's name in DSC would be matched with his/her name entered while filing the form(DIR-3 KYC); and
  • In case the PAN /Name in DSC does not match with PAN/Name entered in the form, they would be required to get a DSC with PAN/Name as specified in the form. 
The following attachment is mandatory to be filed in all cases:

  • Proof of Permanent address Conditional attachments;
  • Copy of Aadhaar Card – In case ‘yes’ is selected in the field “Whether Citizen of India";
  • Copy of Passport – In case ‘Yes’ is selected in the field “Do you have a valid passport”(In the case of Foreign Director who does not have Adhar); and
  • Proof of Present Address – In case ‘No’ is selected in the field “Whether the present residential address is same as permanent residential address” (No when permanent address is not same as Present address, then required to attach present as well as permanent address proof separately).
Following Documents duly attested by Practising Professional (CS/CA/CMA):
 
  • Proof of Identity PAN / Passport / Aaadhar card as applicable.
  • The proof of identity document should have persons’ full name, his father’s full name along with a photograph of the applicant and his date of birth.
  • Proof of Address.
  • Optional attachments, if any. And all above documents shall be duly signed.
In the case of Foreign Director:
 
  • Copy of Passport duly signed & attested by authority prescribed, and
  • Residential proof of respective Country duly signed & attested by authority prescribed. (Bank Statement/ Electricity bill/ Telephone bill/ Mobile bill, but shall not older than 1 year). 
Important key points while filing form:

  • A minor can’t file. (Person should be minimum 18 years of age while filling this application.)
  • Enter your personal mobile number. Please note that the same will be verified by OTP.
  • Country Code other than +91/91/0 shall be allowed only in case Whether resident in India is selected as ‘No’.
  • Mandatory to select ‘Yes’ in the field 11 (Do You have a valid passport) in case ‘No’ selected in the field “Whether Citizen of India”.
  • Enter your personal email ID. Please note that the same will be verified by OTP.
  • eForm is digitally signed by the same person i.e. applicant who is filing the application.
  • Please note that the PAN mentioned in the form and the PAN mentioned in the DSC affixed, must be the same for successful validation. 
  • In case of foreign nationals, who do not have PAN, the name mentioned in the form must be the same as the name mentioned in the DSC affixed for successful validation.
  • eForm is digitally signed by a Chartered Accountant/ Cost Accountant or Company Secretary in whole-time practice.
  • If a director fails to file DIR-3 KYC the MCA21 system will mark all approved DINs (allotted on or before 31st March 2018) against which DIR-3 KYC form has not been filed as ‘Deactivated’ with reason as ‘Non-filing of DIR-3 KYC’.
Fees Details for DIR-3 KYC:
 
  • KYC filed before Sept 15, 2018 by an applicant who has been allotted DIN on or before 31st March 2018 and whose DIN is in ‘Approved’ status: ZERO i.e NO FEES 
  • KYC filed after Sept 15 2018 by an applicant whose DIN status is ‘deactivated’ and the reason for deactivation is ‘Nonfiling of KYC in DIR-3 KYC’: 5000/- (DELAY FEES)
Once Application filed, Approval mail shall be sent to the email ID of the applicant and to the user who has filed the eForm.
 
MCA notifies DIR-3 KYC will be available on MCA21 Company Forms Download page w.e.f 14th July 2018 for filing purposes. Click here to download the form.




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