DIR 3 KYC How to avoid Disqualification!20 min read

DIR-3 KYC DIRECTORS KYC UPDATION 5 Things you must know! File within 30th September 2019 , post which penalty of Rs 5000 for support contact 9962 260 333/ 9513 939 333 / 044 485 60 333 / 080 619 35 527

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DIR-3 KYC UPDATION
DIR-3 KYC UPDATION

Form DIR 3 KYC (Director’s KYC) Update; How to avoid Penalty and Disqualification!! Filing Compulsory for All DIN holders who got their DIN prior to 31.3.2019, due date 30th September 2019

DIR 3 KYC

MCA (Ministry of Corporate Affairs) has amended and inserted a new rule, Rule 12A (Directors KYC) vide the ‘Companies (Appointment and Qualification of Director) rules Fourth Amendment Rules, 2018 and has notified the format of e-form DIR-3 KYC (Director’s KYC) which mandates the KYC Updation in eForm DIR 3 KYC (DIRECTOR’S KYC) For all directors, And all partners/Designed partners of LLP failing which the directors/Partners DIN would be disqualified and would be liable for penalty of Rs.5000/-, The de-activated DINs would be re-activated by paying the requisite fee of Rs 5000/-.

Please be aware that the Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019 have been notified w.e.f 25th July 2019.
As per the said notification:
i) eForm 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 eform DIR-3 KYC but wants to update his details.
ii) Web service DIR-3-KYC-WEB is to be used by the DIN holder who has submitted DIR-3 KYC eform in the previous financial year and no update is required in his details extended the due date to 30th September 2019,

Note

Companies (Registration office and Fees) 5th Amendment Rules,2018 & Companies (Appointment and Qualification of Directors)6th Amendment Rule,2018 20/09/2018

Companies (Registration office and Fees) Amendment Rules,2019  30/04/2019

Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019 have been notified w.e.f 25th July 2019

Do you know how many directors have faced disqualification issues (DIN disqualification)?

Well, due to the strike-off (Company dissolution action) action taken against more than 3 lakh companies and it has directly impacted more 6 lakh directors, who were directors in the Strike off companies had their DIN disqualified.

Rule 12A DIR 3 KYC (Directors KYC) is a new way in which directors can face disqualification and render your DIN as inactive.

please note that this rule applies to all Directors of all companies and all partners/designated partner of all LLPs, irrespective of DIN being active or inactive and directors whose DIN is already disqualified, have to get their Director DIN updating completed, As per the latest updated DIR 3 FORM released dated 13th August 2018, AADHAR is not a Compulsory attachment.

The New eForms DIR 3 KYC, DIR 3 KYC WEB for the Year 2019 which has been released and needs to filed by 30th September 2019

As per notification dated 27th July 2019, the due for the yearly compliance has been changed to 30th September 2019

Latest Message on E-form DIR-3 KYC (DIR 3 KYC WEB) filings on Annual Basis :

As per rule 12A of the Companies (Appointment and Qualification of Directors) Rules 2014, “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 June of immediate next financial year.

Provided that every individual who has already allotted a Director Identification Number (DIN) at 31st March 2018, shall submit e-form DIR-3 KYC on or before 5th October 2018.”

However, the DIR-3 KYC e-form presently available on the portal does not cater for the following:

(i) Filing on an annual basis, and
(ii) Filing in respect of DINs allotted post 31 March 2019. It presently caters only to those individuals who were allotted DINs as on 31st March 2018 and whose DINs have been marked as “Deactivated due to non-filing of DIR-3 KYC”.

Stakeholders may please note that 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.

With the objective of making the form more user-friendly, the form is presently being modified to enable pre-filling of data & information. So, that annual filing can be done by DIN holders in a simple and user-friendly manner.

The revised form which will be shortly deployed can be filed without any fee within a period of 30 days from the date of deployment. Accordingly, DIN holders who had filed DIR-3 KYC form earlier and complied with the said provisions may kindly await the deployment of the modified form for fulfilling their compliance requirements.

DIR 3 KYC Forms for the Current Financial year 2018-19 which was supposed to be released by 1st April 2019 has not been released, due to this anomaly and nonavailability of the eForm DIR 3 KYC, the due date is expected to be extended, its further clarified that all DIN holders have to file the DIR 3 KYC every year by 30th April June, due date for the FY 2019 is 30 days from the date of deployment/availability of the Form in MCA Portal its expected to start from 1st June 2019 and end by 30th June 2019

What is KYC? (DIRECTOR’S KYC)

KYC refers to Know your customer (alternatively know your client or ‘KYC’), the government wants to reconfirm your identity and what you update your KYC. And, Do you want to know what compliance you need to do, and how to avoid MCA Penalty and Director disqualification.

DIR 3 KYC (Director’s KYC) 

    • DIR-3 KYC (Director’s KYC) is to be filed every year before 30th September 2019
    • A fixed penalty is Rs. 5,000/- for late filing.
    • A DIN allotted prior to 31st March 2019 due date is 30th September 2019 (eForms DIR 3 KYC WEB, Late fee will be INR 5,000/-
    • DIR-3 KYC (Director’s KYC) form is notified on 5th July 2018.
    • DIR-3 KYC (Director’s KYC) is notified to come into effect from 10th July 2018.
    • Mobile number & email id of Director only to be mentioned and it is to be certified by a professional that those belong to the Director
    • DIR-3 KYC (Director’s KYC) Need to be done  for even for disqualified directors [w.e.f.: 10th Jul]
    • Consequences of Nonfiling DIR-3 KYC (Director’s KYC) is your DIN will be ‘Deactivated’ with a reason as ‘Non-filing of DIR-3 KYC’.
    • The form should be filed by every Director using his own DSC and should be duly certified by a practicing professional (CA/CS/CMA)
    • The form should be filed by every partner/ Designed partner of all LLP’s using his own DSC and should be duly certified by a practicing professional (CA/CS/CMA)
    • No Government fees are required to be paid for filing the forms 
    • OTP Validation for Foreign Mobile Numbers is also compulsory
    • This Form is Straight Through Process (STP) model, No RoC approvals
    • Aadhar becomes optional as per the latest version of form DIR-3 KYC from August 13th, 2018. However, applicants are required to provide any one of the below as mandatory proof:   
    •      -Passport,
           -Election(voter identity) card,
           -Driving license
           -Aadhaar
    • MCA Clarification on Duplicate DIN / Multiple DIN numbers- As per the extant rules, in respect of an individual who is in possession of Duplicate/Multiple DINs, he can retain the Oldest DIN only.- DINs obtained later have to be surrendered.- Further DIN once associated is NOT eligible for surrender.
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TO UPLOAD AND FILE DIR 3 KYC, PLEASE CLICK ON THE LINK PROVIDED BELOW (Log in with your Gmail Account or Create a new login and select DIR 3 KYC and upload the required documents and our expert team will take care of the rest)

https://portal.virtualauditor.in

Sl. No. Particulars Details
1. Form No. DIR-3 KYC, DIR 3 KYC WEB
2. Date of deploying the new form July 10, 2018
3. Frequency of filing Annually
4. Applicability of form Every director who have obtained DIN on or before 31/03/2019 (only for this FY)

Every individual who has been allotted DIN as on 31st March of FY

DIN status of such directors should be “Approved” To be filed by “disqualified directors” also.

5. The due date for filing form

On or before 30th September 2019 of every year 

On & after 30th September 2019- Late fee will be INR 5,000/-

6. Requirements for filing the form Unique personal mobile number

Personal email ID

These are mandatory for generating the OTP for verification purposes.

7. Signature requirements ·Signed using director’s own DSC

Certified by practicing professional (CA/CS/CMA)

8. Consequences of non-filing The authorities shall deactivate the DIN of an individual who does not intimate his particulars in e-form DIR-3 KYC.

The late fee will be INR 5,000/-

The deactivated DIN shall be reactivated only after filing e-form DIR-3 KYC and on payment of Rs.5,000/- (eForms DIR 3 KYC for the Year 2019 is not yet released hence the due date may be extended)

 

MCA ( Ministry of Affairs ) has issued this warning 

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DIN UPDATION: DIRECTOR’S KYC UPDATION IN FORM DIR 3KYC (Director’s KYC)

Ministry of corporate affairs has issued an order to update all KYC of Directors vide its circular update on its official website www.mca.gov.in

Therefore, complying with the notification can be the deciding factor between directors of a company, which is a complaint that’s thriving with and one that’s well directors being disqualified and with huge penalties for non-compliance.

But, what does DIRECTOR KYC UPDATION even mean?

MCA update on director KYC update on its website www.mca.gov.in reproduced below

“As part of updating its registry, MCA would be conducting KYC of all Directors of all companies annually through a new form viz. DIR-3 KYC to be notified and deployed shortly.”

APPLICABILITY OF THE CIRCULAR TO UPDATE THE DIN KYC UPDATION (DIRECTOR’S KYC)

Who has to file DIR 3KYC?

All the Individuals, whether they are residents in India, Non Residents or Foreign nationals, who are directors/partners any Companies/LLP are needed to file.

What is the Time limit for filing DIR 3KYC?

All Individual directors in company or partners in LLP, who have been allotted DIN till 31 March 2019 are needed to file e-form Dir-3 KYC (eForms DIR 3 KYC for the Year 2019 is 30th September 2019) Late fee will be INR 5,000/- 

What if the DIN is disqualified or DIN is not active?

If you are director holding DIN which was deactivated due to disqualification arising out non-compliance and your DIN was allotted before 31st March 2019 and was deactivated due to disqualification, then it would be mandatorily required to file form DIR-3 KYC on or before the due date. (eForms DIR 3 KYC, DIR 3 KYC WEB for the Year 2019 is 30th September 2019 ) – A late fee will be INR 5,000/- 

Does this form DIR 3 KYC apply to LLP?

DIN number for partners/Designated partners are allowed under Section 153 of the Companies Act 2013, hence it is applicable to partners of LLP’s

If you are partner/designated partner of an LLP holding a valid DIN allotted before 31st March 2019, then would be mandatorily required to file form DIR-3 KYC on or before due date (eForms DIR 3 KYC, DIR 3 KYC WEB for the Year 2019 is 30th September 2019) – Late fee will be INR 5,000/- if filed after 30 days

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.

PROCEDURE AND DOCUMENTS REQUIREMENTS FOR DIR 3 KYC COMPLIANCE

  • The application should be filed in DIN 3 KYC E form
  • Directors must ensure
    • Unique Personal Mobile Number 
    • Personal Email ID
    • This should be verified by One Time Password(OTP).
    • All Directors KYC Documents Such as
      • Copy of PAN
      • Aadhar Number
      • Passport ( If held)
      • Copy of Current address proof ( Bank Statement or telephone Bill)

Thus, the form should be filed by every Director using his own DSC and should be duly certified by a practicing professional (CA/CS/CMA).

Filing of DIR-3 KYC would be mandatory for Disqualified Directors also.

DETAILS TO BE PROVIDED BY DIRECTORS FOR DIR-3 KYC 

Sl. No.

Particulars

Details

1. DIN  
2. Director’s Name

First name

Last name

Middle name

 
3. Director’s Father’s Name

First name

Last name

Middle name

 
4. Whether a citizen of India

Yes/No

 
5. Nationality  
6. Whether resident in India  
7. Date of birth  
8. Gender  
9. Income Tax PAN

(provide a copy of the same)

In the case of Indian nationals, Income-tax Permanent Account Number (PAN) is mandatory in all cases

In case the details as per Income-tax PAN are incorrect, director/designated partner is advised to first correct the details In PAN.

 
10. Voters’ ID card number

(provide a copy of the same)

 
11. Do you have a passport

Yes/No

 
12. Passport Number

(provide a copy of the same)

Mandatory in case of foreign nationals

 
13. DL Number

(provide a copy of the same)

 
14. Aadhar Number

(provide a copy of the same)

 
15. Personal mobile number  
16. Personal Email ID  
17. Permanent residential address in full  
18. Whether present and permanent residential address are the same?

Yes/No

If no, then provide details of both

 
19. Present residential address in full  
20. Attachments:

Self-attested copy of ID proof and  address proof

In the case of foreign nations, documents are required to be notarized and apostilled along with self-attestations.

 

Consequences of Non-Compliance  DIR-3 KYC Forms

What happens if the forms are not filed within the due date?

Well, your DIN will be marked as Deactivate and you cannot sign any E-Forms related to the company or get appointed in any other pending disqualification

After expiry of the due date, the KYC form is to be filed, the MCA 21 system will mark all approved DINs (allotted on or before 31st March 2019) against which DIR-3 KYC form has not been filed as ‘Deactivated’ with a reason as ‘Non-filing of DIR-3 KYC’.

How to Get DIN Reactivation after  Disqualification arising out Non Filing of DIR3 KYC

Reactivation is possible, subject to late fees payment and it and action may follow for noncompliance

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.”

Once, the form is fully filled along with all the attachments and singed with Digital Signature of the Directors and the practicing professional, Proceed with pre scrutiny to generate the OTP

Step by Step Guide to filing your DIR 3 KYC

STEP-1: Download form from the MCA website or click here

STEP-2: Enter your DIN number

STEP-3: Validate your name as per PAN database

Name and relevant credentials

The applicant must enter his and his father’s first and last names. The name entered should match the one mentioned in the PAN.

STEP 4: Enter your proof details (Passport number, Aadhar number, etc)

STEP 5: Enter your nationality, Date of birth, Permanent and present address.

Nationality

It is important to declare your nationality. In the case of foreign nationals who serve as company directors nationality as declared in the passport should be selected.

Update Date of birth as per PAN database 

Directors must enter his date of birth in the DD/MM/YYYY format it should with the date of birth as per PAN database

Address

While filing the form it is mandatory to enter your permanent residential address. Make sure that these details match the proof of permanent address that is to be attached (Aadhar, Passport, Driving license and Voter ID)

Updating Contact Details and OTP verifications

start to enter your personal mobile number which will be verified by an OTP. Country codes other than +91/91/0 will be allowed only if the individual is not a resident of India. Likewise, you need to enter your personal email ID, this will also be verified by an OTP. After submitting your email ID and phone number, click on the button that says ‘Generate OTP’. Separate OTPs will be sent to your mobile number and email ID.

Note

An OTP can be successfully sent to the mobile number and email ID against one form for a maximum of 10 times in one day, and twice in a span of 30 minutes.

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INSTRUCTIONS TO FILL THE FORM DIR 3 KYC

Instructions to fill the eForm are tabulated below at field level. Therefore, Only important fields that require detailed instructions to be filled in eForm are explained. Self-explanatory fields are not discussed.

Field Number

Section Name

Field Name

Instructions

1. (a) Director Identification Number (DIN)

Should be an ‘Approved’ DIN. In the case of Deactivated DINs, DINs with status ‘De-activated’ due to reason ‘Non- filing of KYC in DIR-3-KYC’ shall be allowed after 30th September 2019.

2. (a) First Name Single alphabet shall not be allowed.

Either of applicant’s First name or Last name shall be mandatory to enter.

The name should be entered as mentioned in PAN since the same shall be verified with PAN database.

  (b) Last name Single alphabet shall not be allowed. Either of applicant’s First name or Surname shall be mandatory to enter.

The name should be entered as mentioned in PAN since the same shall be verified with PAN database.

  (c) Middle Name The name should be as per PAN database.
3. (a) First name Single alphabet shall not be allowed.

Either of father’s First name or Last name shall be mandatory to enter.

The name should be entered as mentioned in PAN since the same shall be verified with PAN database.

  (b) Last name Single alphabet shall not be allowed.

Either of Father’s First name or Surname shall be mandatory to enter. The name should be entered as mentioned in PAN since the same shall be verified with PAN database.

  (c) Middle Name The name should be as per PAN database.
4.   Nationality Foreign nationals shall select the nationality as declared in the passport.
 

Field Number

Section Name

Field Name

Instructions

5.   Date of Birth Enter date in DD/MM/YYYY format.

A person should be a minimum of 18 years of age while filling this application.

6.   Income-tax PAN

Enter your Income-tax permanent account number  (Income tax PAN). Income tax PAN is mandatory for Indian Citizens.

7.   Verify income-tax PAN If Income-tax PAN is entered, it is mandatory to click on ‘Verify income-tax PAN’ button.  The system shall verify the details based on PAN.

Ensure that the name (first, middle and last name), father’s name (first, middle and last name) and date of birth are as per the income-tax PAN details.

8.   Do you have a valid passport Mandatory to select ‘Yes’ in case ‘No’ selected in the field “Whether Citizen of India”
9.   Passport number Mandatory, to enter if ‘Yes’ has selected above in field 11
10.   Aadhaar Number Optional
11.   Personal Mobile Number 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 has selected as ‘No’.

12.   Personal Email ID Enter your personal email ID.

Please note that the same will be verified by OTP.

13.   Send OTP This button has enabled only after successful Pre-scrutiny of the form.

Click on this button to send OTP to your mobile number and email ID.

Please note that separate OTPs will be sent to a mobile number and email ID.

Further please note that OTP has successfully sent to the mobile number

and email ID against one form, for a maximum of 10 times in one day and twice in a span of 30 minutes.

For further changes, you may download a fresh form on the same day or try the next day.

 

Sr.No.

Section Name

Field Name

Instructions

14.   Enter OTP for Mobile Number Enter the OTP received on your mobile number.
15.   Enter OTP for Email ID Enter the OTP received on your email ID.
16.   Verify OTP This button will be enabled after OTP for mobile number and email address are entered.

Please note that the OTPs must be verified before you try to upload the form.

17.   Permanent residential address Enter your permanent residential address.

Please note that the details should match exactly with the proof of permanent address attached.

Foreign Pin code can be entered only in case state selected is NA.

18.   Whether the present residential address is the same as permanent residential address If ’Yes’ then the present residential address has displayed automatically by the system and has the same as the permanent residential address. Or Else, the present residential address has to enter.
19.   Present residential address Please note that the address in India has to enter. And, in case you are a resident in India.

Attachments

The following attachment has mandatory to be filed in all cases:

Has to digitally signed by Applicant

Proof of Permanent Address – Address proofs like passport, election (voter identity) card, and ration card, driving license, electricity bill, telephone bill or Aadhaar has to attach and has to be in the name of the applicant only.

Conditional attachments Copy of Passport – In case ‘Yes’ has selected in the field “Do you have a valid passport”

Proof of present Address – In case ‘No’ has selected in the field “Whether the present residential address has the same as permanent residential address”

Certification Ensure, that the form has digitally signed by a Chartered Accountant/ Cost Accountant or Company Secretary in whole-time practice. Enter the details of the practicing professional and attach the digital signature.

Relevant MCA Notifications, wherein the last date has extended or e-form DIR-3 KYC has amended are as under:

Companies (Registration Offices and Fees) Fourth Amendment Rules, 2018: MCA Notification it. 21 Aug. 2018

Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2018: MCA Notification it. 21 Aug. 2018

CONCLUSION

Given the strictness of the government, it is better to comply than face any disqualification or penalty

The government’s resolve to weed out shell companies and dummy directors results from the apprehension that 10-lakh odd company has several directors who are of no consequence to the company even though the requirement for DIN has introduced sometime in 2006.
 

This is a very important step taken by the government due to the increase in shell companies of directors are fake and non-existent and due to shell companies used for money laundering activities and may take action accordingly.

Caution! The government may consider all the directors who do not file DIR-3 KYC the as directors of Shell companies may take action accordingly

The consequence of false or incomplete declaration is that the director shall be liable to be penalized under section 448 of the Companies Act and under the relevant provisions of the Indian Penal Code 1860 and any other law as applicable.

Given, these reasons you should not miss any filing your DIR-3 KYC forms (eForms DIR 3 KYC (DIR 3 KYC WEB) for the Year 2019 is  30th September 2019 

As per notification dated 25th July  2019, the due for the yearly compliance has changed to 30th September 2019.

 

In case of any help or assistance in filing your DIR 3 KYC, DIR 3 KYC IN Chennai, DIR 3 KYC in Mumbai, DIR 3 KYC in Bangalore  contact Virtual auditor support team on 9176044244/9513 93 9333/044- 48560333 /mail us [email protected], our team will guide through the entire process and help you comply

 

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DIR 3 KYC How to avoid Penalty and Disqualification! Virtual Auditor
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DIR 3 KYC How to avoid Penalty and Disqualification! Virtual Auditor
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DIR 3 KYC How to avoid Penalty and Disqualification! Virtual Auditor DIR-3 KYC for support contact 9962 260 333/ 9513 939 333 / 044 485 60 333 / 080 619 35 527 due date expected to be 30th September 2019 as the new notification
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6 COMMENTS

  1. Please suggest what steps a company should take if a Director don’t update or not willing to update KYC on MCA Portal till 31st August, subsequent to which his/her DIN become de-activated.

    As the Annual Filing period is not far, the company has to perform various compliance involving all the directors of the Company.

    Looking forward for a solution.

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