Directors Identification Number (DIN)
A director is an individual who is a constant support to the functioning of a company. He is like a guiding light to the company who helps it survive through thick and thin. Directors are a trusted authority of the shareholders who elect them to handle the business affairs of the company. Directors along with other personnel in the top management define the culture and modus operandi of a company. It thus shows how important is it for a company to have the right individuals who set the tone at the top.
Being a part of the company’s senior management, a director’s appointment has to be as per the laws and rules framed under the Indian company law (i.e Companies Act of 2013). There are certain pre-requisites for a person to be appointed as a director in a company. Some of them are unsaid while some are expressly mentioned under law, one of them being the Directors Identification Number (DIN).
Moving forward, we shall learn about:
1) What is DIN?
DIN is an 8-digit, unique identification number given to a person who is eligible to be appointed as a director in a company.
One of the general conditions for the appointment of the director states that a person can be appointed as a director only if he possesses a Directors's Identification Number (DIN).
2) What is the use of DIN?
Whenever any document concerning the company is signed by its Directors, they are also required to specify their respective DINs.
3) What is the procedure to apply for DIN?
(i) In the case of an already existing company, every person who is to be appointed as a director shall make an application for the allotment of DIN in form INC-3.
(ii) In the case of a company that is to be newly incorporated, every person to be appointed as a director shall submit an application for allotment of DIN in form INC-32 (SPICe).
(iii) An applicant can file the application through the portal of the Ministry of Corporate Affairs (MCA).
(iv) An applicant shall attach the documents such as a photograph, identity proof (ID proof), residential proof, signature, and a copy of board resolution stating the applicant’s appointment as a director.
(v) An applicant shall file the application by affixing his own digital signature and must get it verified by the Company secretary who is in full-time employment by the company in which he is to be appointed as a director.
(vi) If an applicant does not have the last name, then a declaration has to be filed in form DIR-3A by filling the surname of his father or grandfather.
4) How is the DIN allotted to the applicant?
(i) Once an application is submitted in the aforesaid form a temporary application number is provided to the applicant through the portal itself.
(ii) The application is later examined by the Central Government and if it is complete and valid in all respects, then the DIN is allotted within 1 month of receiving the application.
(iii) If the application is defective or incomplete then an additional time period of 15 days is granted to submit a rectified application.
(iv) The approval of the application is communicated either through a letter or electronically.
(v) In case an incomplete or defective application is not fully rectified, then the application is rejected. Also, in such cases, the application fees are not be refunded to the applicant.
(vi) When a DIN is allotted, it is allotted for the lifetime of a director.
5) What are the basis on which a DIN application shall be rejected?
On scrutiny of the DIN application, the Central Government may reject the same if:
(i) The applicant fails to submit the photograph of himself, proof of date of birth, residential proof or
(ii) The above documents and other details such as the signature submitted with the application are invalid.
(iii) The documents required to be attached with the application form are not self-attested.
6) When is a DIN cancelled or surrendered?
Under the following circumstances a DIN shall be de-activated, cancelled, or surrendered:
(i) On the death of the holder of DIN.
(ii) In case the holder of DIN is declared as lunatic or of unsound mind by the Court of competent jurisdiction.
(iii) When the holder of DIN is declared insolvent by Court.
(iv) When more than 1 DIN is allotted to the same person. The details so submitted under these multiple DINs of the same person shall be clubbed together.
(v) When a person voluntarily surrenders his DIN in the prescribed form.
7) Other relevant points about DIN:
(i) A person cannot be allotted more than 1 DIN. A person can thus hold multiple directorships in various companies within the prescribed limit but under the same DIN.
(ii) Every person who has been allotted a DIN as of the end of the financial year shall submit a directors KYC form DIR-3-KYC by 30th April of the succeeding financial year.
(iii) If a person fails to file the directors' KYC form, then his DIN shall be de-activated and shall not be re-activated until such form is filed.
Conclusion:
A Directors Identification Number thus provides an authenticity to the allottee who is a director. It provides the law enforcement authorities with the details of the concerned director. As the requirement of DIN is mandated by law, it prevents any company from having any imprudent person in its Board of Directors. In case of any default or malpractices on the part of the director, the law enforcement authorities can cancel the DIN thereby disabling such director from being appointed as one, in any other company. Directors being the persons who enjoy power and position of authority in a company shall thus be responsible enough to comply with these provisions.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.
