Director Identification Number (DIN) of Indian companies is a special identification number assigned to individuals willing to be directors in the companies under the Companies Act, 2013, which is issued by the Ministry of Corporate Affairs (MCA). The main role of a DIN is to identify the identity of the directors and to bring transparency to the corporate governance.
Any person who is appointed to hold the office of a director in a company needs to acquire a valid Director Identification Number (DIN) before taking the office. A person is not entitled to occupy a position of a director over any registered company without its consent.
Significance of Director Identification Number (DIN)
DIN plays a crucial role in enhancing corporate compliance and accountability. Its importance can be attributed to several reasons that include:
- Director Identity: DIN provides a unique, lifelong identity for directors, which discourages fraud.
- Company’s transparency: DIN enables monitoring of compliance and abuse of corporate structures by following the participation of directors in various companies.
- Compulsory in Filings: Directors should state their DIN in every filing, form, and return that they prepare and present to the MCA.
- Legal Requirement: No person can be legally appointed as a director without a DIN.
Who Needs a DIN?
A Director Identification Number (DIN) should be applied by the following persons:
- Any person can be appointed as a director of an Indian company.
- Current directors of a firm who have yet to obtain a DIN.
- Identified partners in an LLP (Limited Liability Partnership).
Procedure for obtaining a Director Identification Number
The process is as follows:
Step 1: Fill application form through SPICe+ Form
At the time of registering the company, new directors are allowed to apply to DIN and submit SPICe+ (Simplified Proforma to Incorporate Company Electronically Plus) form.
Step 2: Application to Existing Companies
In case a company has to add one more director, the application is possible with the use of Form DIR-3 in the portal of MCA.
Step 3: Document Submission
- Identity evidence (PAN Card is required among Indian citizens).
- Evidence of residence (Required documents are Aadhar, Passport, Voter ID, or Driving License).
- Passport size photograph.
Step 4: Digital Signature Certificate (DSC)
The application should be digitally signed with actual Digital Signature Certificate (DSC) of the applicant.
Step 5: Approval from MCA
After the application has been submitted, the MCA verifies it. A special Director Identification Number (DIN) is granted on approval.
Documents Required for DIN Application
To have an easy application for the Director Identification Number, these are the documents required:
- Self-certified copy of PAN card (Indian nationals).
- Passport (required by foreign nationals).
- Two months of evidence of residence.
- Recent photograph.
- Digital Signature Certificate (DSC).
Validity of Director Identification Number
The DIN granted remains valid. It does not require renewal. Nonetheless, the directors should make sure that they adhere to the MCA norms in a timely manner, including:
- KYC of DIN: Directors need to submit their contact details every year under DIR-3 KYC.
- Modification of Changes: In case of any modification in personal information like address or contact number, directors are required to make the same through MCA using Form DIR-6.
Legal Compliance of Business with DIN
Business compliance is also of significance as the directors of a company should have valid DINs. This and some of the compliance requirements include:
- Annual returns, annual financial statements with valid DIN information.
- Referral to DIN in any form that is filed with the Registrar of Companies (RoC).
- Ensuring that the directors update their DIN KYC yearly.
An attorney to be used in adhering to the yearly practices usually recommends that companies manage DIN-related files to prevent fines.
Consequences of Not Having a Valid DIN
Lack of compliance with the requirements of DIN can result in:
- Veto on the appointment of directors.
- Failure to submit relevant forms to MCA.
- Punishment for the directors as well as the company.
- The Companies Act, 2013, disqualifies directors.
In this manner, the business compliance is strengthened by the stringent DIN-related requirements.
Cancellation and Surrender of DIN
A DIN can be cancelled or surrendered under some circumstances, including:
- Duplicate DIN allotted.
- Death of the director.
- An effective court declares the person to be of unsound mind.
- Voluntary resignation in case the individual is no longer a director in any company.
It is done by submitting Form DIR-5 and other supporting documents.
Kanakkupillai Assistance for DIN and Compliance
Business compliance in India is often a difficult task to handle, particularly DIN and other filings. This is where the Kanakkupillai assistance is provided.
- Streamlined DIN Application: Kanakkupillai assists people in submitting DIN applications without failures or procrastination.
- Annual Compliance Support: Another thing to consider is ensuring that the DIN KYC and other annual compliance requirements are filed on time.
- Business Compliance Advice: Expert information on the need for business compliance and the aspects of how to comply with the MCA requirements.
- Timely Updates: The update of any change in the director’s details can be easily realised with the professional assistance of Kanakkupillai.
With the help of Kanakkupillai, companies have an opportunity to concentrate on expansion while observing 100 percent compliance with MCA standards.
Conclusion
The Director Identification Number (DIN) is not only a statutory requirement but is a very important constituent of legal compliance of businesses in India. It guarantees accountability, transparency and easy governance within the corporate world. As the role of business compliance continues to rise, all companies are required to ensure that their directors have valid DINs and have current records.
