The Ministry of Corporate Affairs identifies the Director of a company only by the DIN. The DIN is the Director Identification Number is a unique 8 digit number that is provided to the proposed or existing Director of a company. The Companies Act of 1956 under Section 266A and 266B were the main reason for the introduction of the DIN.
Director of a Company
A Director is appointed by the Board of the company and their powers are derived from the AOA (Articles of Associations). The main purpose of the Director is to determine the policies and regulations of the company and implement them for the betterment of the development of the company. They have to look after the managerial and financial activities of the company and maintain the legitimate functions of the business. In the case of the One Person Company, the shareholder can also be the Director of the company. The maximum number of Directors appointed by the company is fifteen, and if they wish to increase the number, then they have to apply for the special resolution of the Board.
The Directors have a major role in the process of the INC and the post-INC of the company or business. According to the AOA, some of the powers of the Director are limited.
Need for DIN
The main reason behind the introduction of the Director Identification Number is to maintain a record the Directors of the incorporated businesses and to keep track of the information about the Director so that they will not involve in any wrong doings or work against the company policy. With the help of this identification number, it is also easy to track the Directors if they have vanished from the company because it helps in identifying their participation in the other institutions in the past and in the current situation.
According to the amendment of the Companies Act of 1956, the DIN is mandatory for all the Directors irrespective of the companies they manage because it is individual specific. Any modifications or changes that are faced by the Director must be reflected the Central government because they have to maintain a live data about the Directors of all the companies that are operating in the country.
The allotment of the Director Identification Number for the applicants is given by the Ministry of Corporate Affairs and the Office of the Regional Director, upon validating the form filed by the applicant. The approving authority of the Central registration centre issues the DIN for the applicants.
Registration of DIN
Any person who is a part of the Board of Directors in the One Person Company or Private Limited Company has to register and obtain the identification number. This is applicable only for the Directors and not for the shareholders of a company. With the use of the DIN, they can register an existing DPIN (Designated Partner Identification Number) or an LLP (Limited Liability Partnership).Before applying for the DIN, a person must apply for the DSC (Digital Signature Certificate).
The Digital Signature Certificate is an electronic format of the paper or physical certificate and serves as an identification proof to access confidential information on the internet or digitally sign certain documents. This was introduced by the Information Technology Act, 2000 to ensure the authenticity and security of the document. The Ministry of Corporate Affairs has appointed authorized vendors from whom they can obtain the DSC. The application can be either filled manually or through online with the help of the legal service companies.
The MCA has stipulated a class-II or above category signing certificate for the e-filling of the form under MCA21. A person who already has a Digital Signature certificate for any other application can use the same for filling the MCA21 and need not require a new DSC.
Applying the DIN
Any person who is above 18 years can apply for the DIN, irrespective of their citizenship and can apply online by visiting the official website of the Ministry of Corporate Affairs. The person has to first register on the website to proceed further and then they can download the PDF format of the DIN form. The PDF form is an interactive form which allows the users to either fill the form offline or online. After the attachment all the documentation, the users have three sections in the web page like the Services, eForms and My Documents. After uploading the form, the applicants have to pay the fee and then the Director identification Number is generated.
Documents required: While filling the DIN form, the applicant has to submit some of the documents in the form like the photos and ID proofs of the applicant. If the applicant is an Indian national, they can produce their PAN card for the identity proof and if the applicant is a foreigner, they have to produce their passport number. And for the residential proof they can provide any one of the following proofs like the Voter’s ID, Driver’s license, Ration card, Bank statement or utility card like the electricity bill, and a proof of date of birth and affidavit in the case of a single name.
After obtaining the DIN, the Director has to inform the company about the identification number so that they can add it to the database. A Director must have only one DIN because it is illegal to obtain more than one DIN. If the Director has an extra DIN, they have to submit it to the Registrar of Companies (RoC).
Rejection of DIN
- Because of the minor errors happen during the filling of the DIN form leads to the rejection of the DIN by the MCA. Some of the common reasons are,
- The name of the applicant and their father’s name must be expanded even if the name is in the abbreviated form in the ID proof.
- If there are any spelling mistakes or the applicant’s name and their father’s name are mismatched in the application.
- The residence proofs that are included in the form must not be older than 2 months from the filing of the form and must be under the applicant’s name.
- If the validity of the ID proofs like the Passport or Driver’s license has expired.
- Using of prefixes in the applicant’s name.
- If the required documents are not submitted properly, example the name, designation or certifications is not mentioned properly.
If the DIN for the applicant is rejected by the Central government, the applicant has to reapply for new DIN.
Resubmission of DIN
Sometimes DIN application will be put under the resubmission because of the mistakes in the addition forms like the expiration of the ID proofs or non-submission of the affidavit or lack of proper attestation in the documents. The applicants have to rectify the additional documents within 15 days from the resubmission, thus if the marked documents in the resubmission are found to be in the correct format, then the same DIN will be approved by the MCA.
Changes in the particulars of Directors
If there are changes in the particulars submitted by the director like the applicant’s address or name and if the applicant is a married woman who wants to change their name must download the DIR-6 form from the official website and modify the required changes and upload the form in the same format as submitting the DIR-3 from. Upon verification of the submitted proof, the Central government will update the changes in the database.
Anand Rajendran, CEO of Uptra.in, a leading provider of legal services, including company registration. He is the Head of Communications at Uptra Consultancy Services, India’s largest online legal services facilitator.