The Indian Wire » Business » DIR-3 KYC : Government mandates filing of KYC for directors in a bid to eliminate shell companies

DIR-3 KYC : Government mandates filing of KYC for directors in a bid to eliminate shell companies

In a bid to eliminate shell companies and update the governments registry of company directors, The Ministry of Corporate Affairs in a notification has directed all directors who have been allotted a Director Identification Number (DIN) on or before 31 March, 2018 to submit their KYC details, as part of the Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2018 which into effect on July 10, 2018.

Every director with a DIN number, irrespective of their current administrative status, need to submit the DIR-3 KYC form by August 31, 2018. This means that even a director who is currently disqualified but holds a DIN needs to file the form. Those who have been allotted their DIN number on or after 1 April, 2018 need to submit the e-KYC for by 30 April, 2019.

Once the due date for filing the form passes, the government will deactivate the DIN of those directors who have not yet submitted their KYC details. The DIN can be reactivated by submitting the form along with a penalty of ₹5,000 by 1 September, 2018.

In the future, all directors who are allotted a DIN as on 31st March of a financial year will be required to submit the e-form to the government on or before 30th April of the upcoming financial year.

While filling the form, the directors will have to provide their personal mobile number and e-mail ID, which will be verified via OTP authentication. The director will also have to furnish his or her PAN, Aadhar, permanent residential address, and passport, if owned.

In case of foreign nationals, providing passport information is mandatory, along with an attested copy of their passport and proof of residence.

The form also needs to be digitally signed and verified by a practising chartered account or company secretary.

The plan is part of the governments initiative to eliminate shell companies and fraudulent directors, as it has been found that dishonest businessmen often nominate their drivers or household help as board members of their companies.

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