eForm DIR-3 KYC: The New Update in Corporate World By CS Madhuri Pandey & Debosmita Pal


TEAM MAMTA BINANI & ASSOCIATES

As the title suggests E-Form DIR 3 KYC is a reform in the corporate world. But a question also comes to mind regarding DIN (Director’s Identification Number) and DIR 3. It is a known fact that to become a Director one has to apply for DIN in Form DIR 3 and for any modification in the form it is done in Form DIR 6. E-Form DIR 3 KYC has been introduced by Central Government to have clear and correct information regarding all the Directors appointed.
 
The circular of MCA states that every Director who has been allotted Director Identification Number (DIN) as on or before 31st March of a financial year shall submit e-form DIR 3 KYC to the Central Government on or before 30th April of immediate next financial year. But, for the current year, DIR-3 KYC is required to be filed on or before August 31, 2018. Extended till Sept 15, 2018
 
Thus the idea behind it all is mere transparency between the company, shareholders and most importantly the MCA.

Points to keep in mind while filing The Form

 
There are few pointers to be discussed before filing the form.

Categories of Directors:

In this matter
, there are 3 types of Directors who are eligible to file the form:

 
Documents required to file E-Form DIR 3 KYC

  1. PAN for Identity Proof
  2. Aadhar Card for Address Proof (Provided mobile number must be updated with UIDAI)
  3. Latest passport size Photograph
  4. Personal Mobile Number and E-mail ID of director for the purpose of OTP Verification
  5. DSC(Digital Signature Certificate of the director) which must be registered on MCA Portal.
  6. Passport is mandatory in case of foreign national only
Note*: Documents must be self-attested

  • DSC: Digital Signature Certificate is a mandatory requirement for the submission of E-Form DIR 3 KYC. It is very important that the DSC is active. Any Director who doesn’t have a DSC will have to create it and get it registered through the MCA Portal.
  • Attestation: E-Form DIR 3 KYC has to be attested by professionals i.e. a Practicing Chartered Accountant/ Company Secretary/ Cost Accountant. The Professionals would obtain an Engagement letter from the Directors and certify and attest the documents attached. The professionals also have to confirm the mobile no. and e-mail ID as provided by the applicant. Also, the professionals have to keep a copy a form and attachments in his records.   

FAQ For E-Form DIR 3 KYC                                                   

(1) Aadhar linkage is required for updation of KYC for company directors. MCA website indicates so but Supreme Court has ordered otherwise. What are the views on the same?
 
Answer: As far as the attachment of Aadhar Card is concerned, MCA has mandated the same for submission of e- Form DIR 3 KYC. The order of the Hon’ble Supreme Court is in the context of Aadhar linkage, related to Bank KYC.
 
(2) Query 1. Is Form DIR 3 KYC required to be submitted by every company or individual who has been allotted a DIN being a Director of the company?
 
QUERY 2: ‘A’ is Director of company X, Y and Z. Now, company X filed DIR 3 KYC of Director A stating all the details of the Director in other companies i.e. Director in Company Y and Z also.
 
Whether Company Y and Z is also required to file e-Form DIR 3 KYC again for the same Director A of X Company?
 
Query 3: What will be the consequences of not submitting E-Form DIR 3 KYC before 31st August?
 
Answer to Query 1: Every individual who has been allotted a DIN on or before 31st March 2018 is required to file e-Form DIR 3 KYC before 31st August 2018.Extended till Sept 15, 2018 In other words, any individual having a DIN (active or deactivated) has to file the form. The Company can file on behalf of the Director.
 
It should be noted that filing of the DIR 3 KYC is a requirement for the Directors. DIR 3 KYC is not on a company to company basis.
 
Answer to Query 2: E-Form DIR 3 KYC is a requirement for the Director to keep his DIN activated. If the company has filed Form DIR 3 KYC in the name of the Director, then there is no need of filing another form since all the required information have been provided in the form already submitted. E-Form DIR 3 KYC is not on a company to company basis.
 
Answer to Query 3: The last date of filling e-form DIR 3 KYC is 31st August as at the moment.Extended till Sept 15, 2018. Any delay in filing the form will be penalized with a fine of not more than Rs. 5000.
 
(3) What about the DSC of Foreign Directors because as mentioned in the Rule, PAN Based DSC is required for Signing e-Form DIR-3-KYC. But most of the foreign Directors do not have PAN Card. In such a situation how we can prepare PAN Based DSC?
 
Answer: In case the Director is a foreign national, passport of the Director is to be attached, bank statement or utility bills (any one of them) can also be attached. As per the requirement of DSC, it is mandatory for the DSC to be active otherwise the form would not be accepted by the portal. Further, the documents that are attached have to be notarized and apostille by the consulate/embassy of the country the director is a citizen of.
 
(4) Should the Mobile no. and email address which is required to be mentioned in DIR-3- KYC be same as mentioned in Aadhar Card?                                                                    
 
Answer: MCA has mentioned in the circular dated 5th July 2018, to provide personal mobile no. and personal email ID in the form for the OTP verification.
 
(5) Whether foreign director, who is on the Board and visit India once in a year, need to obtain a digital signature in India?
 
Answer: As per the MCA circular active Digital Signature Certificate is required for the approval of the form. E-Form DIR 3 KYC required to be submitted by every Director on Board. Central Government and Regional Director (Northern Region) has been authorized to deactivate the DIN in case the file is not filed or any kind of non-compliance is observed as per Rule 12A.
 
(6) Query 1. When an applicant proceeds to insert the data of the Indian Mobile number in Point No.14 “Personal Mobile Number” in the form but the form does not allow to enter the same and an Error Notice comes that "Indian Country cannot be selected in case Resident of India is a non-resident".
 
Query 2: When the applicant tries to fill his present residential address of say, Mumbai, India in Point No. 20 “Present Residential Address”-Error interrupts as "Indian State cannot be selected in case NO has been selected in Field whether a resident of India." What solution can be provided in such a case?                                      
                
Answer to Query 1: If such an error is occurring then the applicant may provide the director’s foreign contact no. for the OTP to generate.
 
Answer to Query 2: In Point No.19, the applicant has to mention that his permanent address is not the same as his present address. Then it will accept the present address and not show an error.
 
(7) Neither the Rules nor the Form asks for the specific requirement for attestation and it only says as per attestation prescribed. Hence, will Notarized documents suffice or the applicant has to abide by the Hague convention in terms of the apostilization?                                                                                                          
 
Answer: The documents being attached in case of foreign national Directors have to be notarized by the consulate of the country in which he is a citizen. After that, it is to be attested by a practising Chartered Accountant/Company Secretary/Cost Accountant.
 
(8) If the address of a Director is not updated in the DIN, then whether it is to be updated first and then need to file DIR 3 KYC with the new address or can the address be updated through DIR 3 KYC? Will the form accept a different address from existing in the Form?                                       
 
Answer: Those directors whose DIN is not updated, they have to update their information in Form DIR 6 before proceeding to file the DIR 3 KYC. After the required updation, E-Form DIR 3 KYC can be filed.

(9) Query 1: Should the form DIR 3 KYC be filed every year of all the Directors or it should be filed for only those DINs which have been allotted for that particular financial year?
      
Query 2: If DIN is allotted in September 2018, should the applicant file DIR-3 KYC on or before 30/04/2019 or 30/04/2020?
 
Answer to Query 1: Yes, E-Form DIR 3 KYC is an annual form to be filed in MCA21 Portal. For the current year the due date is 31st August, 2018 Extended till Sept 15, 2018, but for the subsequent financial years, it is to be filed before 30th April every financial year. Any delay in filing after the due date will be penalized with fine of not more than Rs. 5,000.                                                                                                                                                                                       
An answer to Query 2: If a DIN is being allotted in September 2018, then it is allotted during the financial year 2018-2019. So he has to file for E-Form DIR 3 KYC within 30th April 2019.
 
(10) The persons possessing DIN which are allotted after 31st March 2018 need not file E-Form DIR 3 KYC as of now by 31st August 2018 but should the filing be done every year hereafter by April 30th?

Answer: MCA stated in Rule 12A and Rule 11(2) and (3) of the Companies(Appointment and Qualification of Directors)Rules, 2014 that any DIN allotted on or before 31st March 2018 should file for E-Form DIR 3 KYC by 31st August 2018.Extended till Sept 15, 2018 Any DIN allotted after 31st March 2018 shall file E-Form DIR 3 KYC within 30th April every year. 
 
(11) If the Director who does not possess Aadhaar Card, how does he proceed with the filing of the form, although there is a court ruling that it is not mandatory. Could you please guide as to how one could proceed with such cases.
 
Answer: The Hon'ble Supreme Court ordered that Aadhar Card is not mandatory for submission of KYC form in the Bank. However, in the case of E-Form DIR 3 KYC, MCA stated in pursuant to Rule 12A and Rule 11(2) and (3) of the Companies (Appointment and Qualification of Directors) Rules, 2014 that attachment of Aadhar card is mandatory in case the person is a resident in India.

However, clarity is still sought in this regard, as of now attaching Aadhar Card is mandatory.
              
(12) Query 1. Would Aadhar Card of the Director be enough for proof of address?
 
Query 2. Does the form require different mobile no. and email id for each separate form or we can give one authorized person number in it as it is quite difficult to approach directors every time for the OTP?
 
Answer to Query 1: In case the applicant is a citizen of India, Aadhar Card is mandatory as a proof of permanent address. In case the applicant is a foreign national Director, Passport is a mandatory document for proof of address.
                                                                                          
An answer to Query 2: The form requires personal mobile number and e-mail ID of the Director applying for E-Form DIR 3 KYC. It is to be advised that the person applying on behalf of the Director shall contact the respective Director and request him to cooperate while the form is being filed.
 
(13) Under the certification section given in the e-form, a note has been given which states “In the case where the applicant is residing outside India, the particulars have to be verified from the documents duly attested by the attesting authority as prescribed”.
 
What does "attesting authority" here mean? Does it mean that the address and id proof of foreign nationals need to be apostilled as required in case of a company incorporation or self-attestation by the foreign national would suffice?
 
Answer: The documents to be attached are required to be notarized and apostilled by the consulate of the country he is a citizen. The clarification section of the form is for the practising professionals who will do the attestation of the documents to be attached in the form.
 
(14) How to deal with the applicants from the North-East, where Aadhar Card is not mandatory. Also as per rulings of the Hon'ble Supreme Court, some interim declarations were made that the Government can't force for the Aadhaar Card. But, MCA had made it indirectly compulsory as once an applicant selects the option of ‘Citizen of India’, he needs to compulsorily mention the Aadhaar number.
 
Answer: The Hon'ble Supreme Court ordered that Aadhar Card is not mandatory for submission of KYC form in the Bank. As in the case of E-Form DIR 3 KYC, MCA stated in pursuant to Rule 12A and Rule 11(2) and (3) of the Companies (Appointment and Qualification of Directors) Rules, 2014 that attachment of Aadhar card is mandatory in case the person is a resident in India.
 
(15) Does each director require Digital Signature Certificate to file their own KYC?
 
An answer to Query 2: E-Form DIR 3 KYC requires an active DSC for the approval of the form. If the     DSC is not active, then he would have to re-register for the same. If the Director does not have a DIN, then he has to create a DIN in order to file and approve the form.

(16) QUERY -1 As per rule 12 of the Companies (Appointment and Qualification of Directors) Rules, 2014, every individual who has been allotted a Director Identification Number under these rules 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 thirty days of such change(s) in Form DIR-6. Please clarify that filing of E-Form DIR 3 KYC will automatically update the information of the Director or Form DIR 6 has to be filed?

QUERY -2: According to help file the name and last name should be entered as mentioned in PAN since the same shall be verified with PAN database. Does PAN mean PAN card or PAN database? For a middle name, it is provided it should be as per PAN Database.

Answer to Query 1: Firstly, the Director whose information is needed to be updated has to file Form DIR 6 providing the updated information. Then file DIR 3 KYC including all the related changes within 31st August 2018. Extended till Sept 15, 2018

Answer to Query 2: Yes, the name should be as per PAN Card provided by the applicant.

(17) Query 1: If Director is an Indian citizen, Indian nationality but resident outside India, what documents have to be attached and would mobile no. outside India work?
Query 2: What documents should be considered as a Permanent Address & Present Address proof.

Query 3: If a Director has a Passport and he attaches the same, will it be approved as address proof?
 
Answer to Query 1: The following documents are to be attached in case the applicant is a non- resident:

  • Passport (Mandatory)
  • Bank Statement, Utility Bills ( any one of them)
  • DSC
  • DIN
  • Passport size photograph
All notarized and attested by professional. Along with personal mobile no. and personal email ID.

Answer to Query 2: The address as mentioned in the Aadhar card is considered as proof of permanent address whereas the address mentioned in the bank statement or telephone bill is considered as proof of present address. This can only be different if the director is a non-resident Indian.
 
Answer to Query 3: As per the circular, Aadhar Card is the proof of address in case of a resident Indian director. Passport is optional for them. But for foreign national directors, the passport is the proof of address. For them attachment for the passport is mandatory.
 
(18) The form requires attachment of Aadhar card and passport separately for permanent address proof. Can anyone of them be attached i.e Aadhar or Passport in the address proof?
Answer: As per the circular, attachment for a passport is made mandatory for foreign national Directors. Therefore, if the applicant is a citizen of India then attachment of Aadhar card would suffice as proof of permanent address.
 
(19) What if the Directors do not provide their Mobile no.? What is to be advised in such a situation?

Answer: Every director filing E-Form DIR 3 KYC who is a foreign national have to provide their personal mobile no. and personal e-mail ID for OTP verification. Therefore, both the requirements need to be provided in the form.
 
(20) Whether KYC of Directors also needs to be attested by professional.

Answer: After the documents being attached in the form the professionals give clarification regarding the correctness of the documents and attestation is done for the same.
 
(21) When a Director has two DINs at the same time and attaches the documents in the E-Form DIR 3 KYC for one DIN, what will be status of other DIN? Would he be required to surrender the other DIN through compounding?

Answer: In case a Director has more than one DIN registered by his name he has to surrender one of his DINs through compounding.
 
(22) Can a Practicing Company Secretary who is also a Director of many companies attest to his own form?

Answer: A Practicing Company Secretary who is also a Director of many companies cannot attest to his own form.

As per e-form DIR 3 KYC professional have to certify the following things:

I declare that I have been duly engaged for the purpose of certification/verification of this form.
I have satisfied myself about the identity of the applicant.

Hence, we can propound that a person cannot engage himself for verification of his details and documents.

(23) While filing the DIR-3 KYC, is a Passport copy enough as Address and Identity proof? What other documents for a director who is a foreigner and not residing in India provide as documents? In the case of foreign nationals what are the documents needed to be attested by authority prescribe.
 
Answer: In case of Foreign Nationals, the documents required are as follows:
  • Passport (mandatory)
  • Driving License ( can be attached as proof of identity)
  • Passport size photograph
  • DSC
  • DIN
  • Utility bill and bank details.
  • Mobile No. and E-mail ID shall be of director’s himself/ herself only and will be verified by OTP.
  • The E-form DIR-3 KYC shall be duly certified by a Practicing Chartered Accountant, Practicing Company Secretary or Practicing Cost Accountant.
  • Documents are required to be notarized and apostilled along with attestations by professionals.
 
(24) A particular Director travels abroad practically every year but refuses to disclose his Passport details saying not mandatory. What will be the plan of action when the question regarding passport comes up?
Answer: Passport details are not mandatory when the applicant is a citizen of India and residing in India for more than 182 days. If the applicant does not satisfy the residential status as mentioned, then passport details have to be mentioned.
 
(25) Query 1: Some directors live abroad so it is very difficult to contact them and submit the form. Moreover, some Indian citizens living abroad do not have Aadhaar. In such situations, deactivating their DIN seems to be unjust. What would be suitable take on this?
 
Query 2: How to get E-Form DIR-3 KYC digitally signed by the foreign Directors? They may not have MCA recognized DSC.
 
Answer to Query 1: Those directors who do not have Aadhar card they can attach passport as their permanent address. Bank statement and utility bills can be added to present address attachment.
An answer to Query 2: For the form to get approved an active DSC of the Director is required. If he doesn’t have a DSC, then he has to create a DSC which is MCA recognized and get it re-registered.

(26) How to file a Director’s DIR-3 KYC when the OTP in mobile and mail will be sent to his personal mobile and mail. Even though DIR-3 KYC is Director specific, Company is filing the form on behalf of the Director.
              
Answer: The form requires personal mobile no. and e-mail ID of the director applying for DIR 3 KYC. It is to be advised that the person applying on behalf of the director alert the same so that the OTP be retrieved in the time since different OTPs are generated in mobile and e-mail ID. A company can file on behalf of the director. But the mobile no and e-mail ID has to be personal.
 
(27) Query 1: What are the documents required to be attached in KYC of the proposed director?
 
Query2: Can Driver’s License having the foreign address as PRESENT ADDRESS of the proposed director?
 
Query 3: What if the proposed director does not have an Indian bank account. Does it have to be notarized/apostille the documents? If Yes, what documents are required to notarise/apostille
 
Answer to Query 1: The documents to be attached in the form are as follows:
 
  • DSC
  • DIN
  • Aadhar card ( mandatory for Indian citizen)
  • Utility bill or bank statement
  • Passport size photograph
  • Mobile No. and E-mail ID shall be of director’s himself/ herself only and will be verified by OTP.
The E-form DIR-3 KYC shall be duly certified by a Practicing Chartered Accountant, Practicing Company Secretary or Practicing Cost Accountant
 
An answer to Query 2: Driver’s license can also be attached as the present address of the proposed director.
 
An answer to Query 3: All the documents attached in the form are to be notarized by the embassy/consulate of the country he is a resident.        
            
(28) Whether self-attestation is required regarding identity proof and address proof in case of resident directors?
 
Answer: Yes, self-attestation is required for identity proof and address proof for resident Directors.
 
(29) Query 1: If a Director has different addresses on Passport and Aadhar Card, which one will be accepted as the Permanent address and Present address.
 
Query 2: If a Director does not have a passport then will it suffice.
 
Query 3: If a Director does not have Aadhar Card, then what else can be affixed?
 
An answer to Query 1: In case the director is an Indian citizen, the address mentioned in the aadhar card would become his permanent address.
 
Answer to Query 2: The attachment for a passport is mandatory in case the director is a foreign national. In case of the director is a citizen if India, then the attachment for a passport has been made optional.
 
Answer to Query 3: Firstly, Aadhar Card is mandatory for address proof for Indian citizen but if the Director does not have Aadhar Card then he can use his Driver’s License or bank statement or utility bill (any one of them) as address proof whereas PAN Card can be affixed for identity proof.

Conclusion

E-Form DIR 3 KYC came into force for the prevention of bogus directorship and other non- compliances. The individuals who are filing the form should provide with all the necessary documents and get them attested by the professionals. The update will put a positive impact on the company itself whose Directors have filed the form. Moreover, the role of professionals has become more significant. To provide a better understanding we have an annexure of the Form at the end of the article.                                                     

Click here to read the disclaimer


Write a Comment

  • What if, someone had mistakenly filed DIR-3 KYC with address different then address registered with MCA without updating address with MCA in DIR-6.

    23-08-2018 / 12:20:44 PM
    Reply