This article is written by Vihang Desai who is pursuing a Diploma in Companies Act, Corporate Governance and SEBI Regulations from LawSikho.

Introduction

KYC stands for “Know Your Customer”. It is a process undertaken by banks and other financial institutions wherein the correct identity of the client is established by verifying his/her personal documents (PAN, Passport, utility bills, etc.) before doing business with them.  

The Ministry of Corporate Affairs (“MCA”) also undertakes a similar process wherein the particulars and documents of individual DIN holders are verified with the help of an electronic form. Doing this ensures that correct details of the DIN holders are updated on the MCA registry.  

This data is very helpful especially when the Government wants to trace a Director or Designated Partner for any acts of non-compliance or fraud committed by him/her. 

what is DIR-3 KYC form and who needs to file it?

DIR-3 KYC is an electronic form (“Form”) which is required to be filed by every individual, whether resident/non-resident/foreign national, having a Director Identification Number (“DIN”).

DIN is an eight-digit unique number allotted by the Central Government to individuals who intend to become Directors in Companies and/or Designated Partners in Limited Liability Partnership (“LLP”).

Even if the DIN holder is not a Director in a Company or Designated Partner in a LLP, they are still required to file Form DIR-3 KYC. 

Time duration to file the Form: This form is to be filed with the MCA on a yearly basis.

Contents of the Form: All personal details of the DIN holder such as his/her full name, citizenship, residential status, date of birth, gender, residential address, mobile number, email address, etc. are disclosed in this DIR-3 KYC form along with latest copies of his/her identity and address proof duly attested by requisite authorities or practicing professionals.

The purpose of filing e-form DIR-3 KYC is: 

• to establish and verify the DIN holder’s identity and address through relevant documents like PAN Card, passport, election card or driving license (identity proof) and electricity bills, telephone bills, bank statements, etc. (address proof). 
• to have correct KYC details of DIN holders in the MCA registry. 

What is the due date of filing form DIR-3 KYC?

DIN holders who are allotted DIN as on 31st March of a financial year and thereby they shall file form DIR-3 KYC on or before 30th September of the immediate next financial year [Rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014].

The following table presents the concise description of the applicable due dates of filing the Form:

Sr. No.	DIN allotment Financial Year	Due Date of Filing	Due Date of filing after CFSS, 2020****
1.	Upto 31st March, 2018	5th October, 2018*	31st December, 2020
2.	1st April, 2018 to 31st March, 2019	14th October, 2019**	31st December, 2020
3.	1st April, 2019 to 31st March, 2020	30th September, 2020***	31st December, 2020

* Companies (Appointment and Qualification of Directors) Sixth Amendment Rules, 2018 dt. 20.09.2018,

** Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2019 dt. 30.09.2019,

*** Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2019 Dated 25.07.2019,

**** Companies Fresh Start Scheme, 2020 (“CFSS, 2020”) General Circular Nos. 12/2020 dt. 30.03.2020 and 30/2020 dt. 28.09.2020.

What are the consequences of non -filing/failure to form DIR-3 KYC?

If Form DIR-3 KYC is not filed within stipulated time then DIN of the individual will be deactivated on the MCA21 portal [Rule 11(2) Companies (Appointment and Qualification of Directors) Rules, 2014].

The de-activated DIN shall be re-activated only after form DIR-3-KYC 3/DIR-3-KYC Web is filed along with fee of Rs. 5,000/- (Rupees Five Thousand Only) or any other amount as prescribed under Companies (Registration Offices and Fees) Rules, 2014 from time to time [Rule 11(3) Companies (Appointment and Qualification of Directors) Rules, 2014].

How to file form DIR-3 KYC?

Download Form DIR-3 KYC

Search for form DIR-3 KYC here and download the same on your computer.

Fill Particulars of the Individual DIN holder

• Open the form and input the DIN in the first field and click on ‘Pre-fill”. 
• Now, enter DIN holder’s name, father’s name, date of birth and PAN as per his/her PAN database.
• Click ‘Verify Income-tax PAN’ button to ensure that correct details are filled as per PAN database.
• Click on applicable radio buttons for DIN holder’s citizenship, residential status and gender.
• Enter Aadhar, passport, driver’s license or voter ID details in requisite fields. 
• Enter unique mobile number and email ID of the individual DIN holder.
• Enter residential address (permanent/present) of the individual DIN holder.
• Attach PAN Card and any one of Aadhar Card, Passport, Driving License or Voter ID as identity proof (Passport compulsory for foreign nationals).
• Attach any one of electricity bill, telephone bill, bank statements, etc. (not older than 2 months from the date of filing) as residential proof. 

The above-mentioned attachments must satisfy the following criteria:

1. Notarized or apostilled by requisite attesting authority in case the individual DIN holder is resident outside India; or
2. Attested by practicing professional (CA/CS, CMA) in case the individual DIN holder is resident in India.

Affix Digital Signatures

Enter details of the practicing professional (CA/CS/CMA) and click on “Check Form” button. Now, affix digital signature (Class 2/Class 3) of the individual DIN holder and practicing professional and click on “Prescrutiny” button.

OTP Verification

Once pre-scrutiny is successful, the “Send OTP” button will get activated. The individual DIN holder will receive two separate OTPs, one on his/her mobile number and another on his/her email ID.

Enter the OTPs in the respective fields and click on “Verify OTP”. 

File Form DIR-3 KYC

After the OTP verification is done, save the form. 

Now, login with your username and password on the MCA21 portal and upload the form.

A challan will get generated once the form is uploaded. One should make it a practice to save the challan for your future reference. 

What is DIR-3 KYC web and how to file it?

If DIN holder has already filed the e-form DIR-3 KYC in any previous financial years and his/her personal details like name, address, mobile number, email ID, etc. remain unchanged then s/he may perform his/her annual KYC by filing DIR-3 KYC Web form instead. The following steps must be followed to do the same: 

Step 1: One has to login with his/her username or password on the MCA21 portal and click on “DIR-3-KYC-WEB” link under MCA services tab to access this version of the form. 

Step 2: Here, the individual DIN holder will enter his DIN and his/her existing mobile number and email ID will get prefilled.

Step 3: Now, just click on the “Send OTP” and input the OTPs sent to his/her mobile number and email ID. 

Step 4: After entering the OTPs, click on “Verify OTP”. On successful verification, click on the submit button to complete the KYC. 

Which form(s) to file for changes in particulars of individual DIN holder?

In case there are any changes in the mobile number and/or email ID of the individual DIN holder then file normal Form DIR-3 KYC on the MCA21 portal.  

In case, there are any changes in the name, address or other details of the individual DIN holder, then file Form DIR-6 first and then file normal Form DIR-3 KYC on the MCA21 portal. 

What is the fee for filing form DIR-3 KYC/DIR-3 KYC web?

If Form DIR-3 KYC/DIR-3 KYC Web is filed within time then no fee is payable. 

If form is not filed within time then a one time fee of Rs. 5,000/- (Rupees Five Thousand Only) is payable.

What if an individual din holder is a disqualified director?

Every person having an approved DIN has to file Form DIR-3 KYC. Hence, disqualified directors are also required to file this form. 

What if an individual din holder has multiple DINs?

If DIN holder has multiple DINs then s/he needs retain the oldest DIN and surrender the rest by filing Form DIR-5 [Rule 11(f) of the Companies (Appointment and Qualification of Directors) Rules, 2014].

Once Form DIR-5 is approved all associations with surrendered DINs will be transferred to the oldest DIN automatically. 

Can non-resident directors provide Indian address and mobile numbers in form DIR-3 KYC?

If DIN holder is resident in India, then the address must be an Indian address and the mobile number also has to be from India.

If DIN holder is resident outside India, then address must be foreign address and mobile number also has to be from a foreign country. 

Conclusion

Directors are “officers in default” and in cases of non-compliance and fraud committed by the company, the Government has to impose penalty or imprisonment or both on each such officer of the company in default.  In order to fulfil this very purpose, the latest personal details of these defaulting officers are required to be maintained by the Ministry of Corporate Affairs in their registry so that timely communication can be sent to them whenever required.

In view of the above, MCA vide its notification dated 5th July, 2018 amended the Companies (Appointment and Qualification of Directors) Rules, 2014 and inserted Rule 12A wherein Form DIR-3 KYC was introduced to ensure that correct particulars of the individual DIN holders were updated in the registry of MCA from time to time.

It is one of the most important good corporate governance measure taken by the Government towards eliminating shell companies and fraudulent directors.

References

1. MCA notifications and circulars: http://ebook.mca.gov.in/Default.aspx?page=notification
2. DIR-3 KYC FAQs: http://www.mca.gov.in/MinistryV2/dir3kycfaq.html
3. DIR-3 KYC Help Kit: https://assets1.cleartax-cdn.com/s/img/2018/08/02123744/DIR-3-KYC-Help1.pdf
4. Article: https://www.corporateprofessionals.com/articles/faq-on-kyc-of-directors-form-dir-3-kyc-and-dir-3-kyc-web/
5. Article: https://ebizfiling.com/blog/mca-extends-various-due-dates-to-31st-december-2020-cfss-2020-and-lss-included/
6. Article: https://cleartax.in/s/directors-kyc-mca
7. Article: https://blog.saginfotech.com/dir-3-kyc-form
8. Article: https://www.mondaq.com/india/directors-and-officers/722090/new-e-form-dir-3-kyc-to-be-filed-by-31-aug-by-directors-in-india-news
9. Article: https://complianceship.com/secretarial/dir-3-kyc/
10. Article: https://www.theindianwire.com/business/dir-3-kyc-government-mandates-filing-kyc-directors-bid-eliminate-shell-companies-66540/
11. Article: https://www.thalesgroup.com/en/markets/digital-identity-and-security/banking-payment/issuance/id-verification/know-your-customer

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