KYC Update Mandatory for Company Directors in India

The Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2018 came into effect on July 10, 2018. (See here for the official notification.)

Announced by the Ministry of Corporate Affairs (MCA) in early July, the amended rules seek to update the federal government’s database of company directors.

Every director to whom the Director Identification Number (DIN) has been allotted on or before March 31, 2018 should file the e-form DIR-3 KYC on or before August 31, 2018. This is an authentication procedure, and will be implemented annually. (The latest MCA notification extends this deadline to September 15, 2018.)

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Even a director who is currently disqualified, but was allotted a DIN needs to file this form.

After the last date, the government will deactivate the DIN of those directors who have not yet completed their KYC. Such persons can reactivate their DIN by filing this form and paying a penalty of US$72.91 (Rs 5,000).

In future, every individual who is allotted a DIN in India as on March 31 in a financial year will need to submit the DIR-3 KYC to the federal government on or before April 30 of the immediate next financial year. For example, if the DIN was allotted on March 31, 2019, then the DIR-3 KYC needs to be filed before April 30, 2020.

The form is available on the MCA’s website. (See Company Forms download page here.)

Key points to remember while filing the form are:

• The DIN of the director should be an officially approved one;
• In case of deactivated DINs, the process to reactivate DINs due to non-filing of DIR-3-KYC will begin after August 31;
• The personal mobile number and email address of the director entered in the form will be verified by a One-Time-Password (OTP);
• In case of a foreign national, the passport number is mandatory;
• OTPs can be successfully sent to the registered mobile number and email against one form, for a maximum of 10 times in one day and twice in a span of 30 minutes. For further chances, a new form must be downloaded on the same day or the next day;
• The contact information, permanent residential address, and PAN stated in the form should match with the proof attached;
• The form should be digitally signed by a practicing Chartered Accountant or Company Secretary; and,
• The following documents must be uploaded to complete the filing process – proof of permanent address; copy of the Aadhaar Card; copy of passport; proof of present address; and other optional attachments, if any.

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