OVERVIEW ABOUT DIR-3 KYC

Director KYC, often referred to as DIR-3 KYC, is a crucial compliance requirement for directors of companies registered with the Ministry of Corporate Affairs (MCA) in India. This mandatory process aims to ensure the accuracy and currency of director details in the MCA database, thereby enhancing transparency and mitigating corporate governance-related fraud.

Key Point about Director DIR-3 KYC

1. Applicability: DIR-3 KYC applies to every individual who has been issued a Director Identification Number (DIN) by the MCA. It is mandatory for all directors.
2. Due Date: The due date for filing DIR-3 KYC typically falls in April each year. However, it’s essential to verify the exact due date on the MCA website or official notifications, as it may change.
3. Mandatory Requirement: Failing to complete the DIR-3 KYC within the specified deadline can lead to the deactivation of the DIN, rendering the director ineligible to serve on any company’s board.

Advantage of Director KYC (DIR-3 KYC)

Here are some advantages of Director KYC (DIR-3 KYC) in India:

1. Enhanced Transparency:

DIR-3 KYC promotes transparency within the corporate sector by ensuring that accurate and up-to-date information about directors is available in the Ministry of Corporate Affairs (MCA) database. This transparency helps stakeholders, including shareholders, investors, and regulatory authorities, make informed decisions about companies.

2. Prevention of Identity Theft and Fraud:

By verifying the identity of directors through Aadhaar and PAN, DIR-3 KYC helps in preventing identity theft and fraudulent activities within the corporate sector. This added layer of security reduces the risk of individuals misusing director identification numbers (DINs) for fraudulent purposes.

3. Compliance with Regulatory Requirements:

DIR-3 KYC is a mandatory compliance requirement for all directors in India. Completing this process on time ensures that directors remain eligible to serve on the board of any company. Failure to comply can result in the deactivation of the DIN, which can have serious consequences for a director’s career.

4. Data Accuracy:

Regularly updating director information through DIR-3 KYC ensures that the MCA’s database contains accurate and current details. This is crucial for the efficient functioning of the corporate ecosystem, as it prevents errors and discrepancies in official records.

5. Prevention of Shell Companies:

The DIR-3 KYC process helps authorities identify and take action against shell companies and dummy directors. By ensuring that real individuals are associated with directorships, it becomes more challenging for shell companies to operate undetected.

6. Improved Corporate Governance:

Accurate director information is fundamental to good corporate governance. With DIR-3 KYC, companies are more likely to have boards that consist of genuinely qualified and accountable individuals, leading to better decision-making and governance practices.

7. Investor Confidence:

Investor confidence is boosted when they know that companies are compliant with regulatory requirements. Accurate director information provided through DIR-3 KYC can instill trust in shareholders and potential investors, which can positively impact a company’s valuation and attractiveness.

8. Legal Protection:

Completing DIR-3 KYC helps directors avoid legal repercussions. Non-compliance can lead to penalties and disqualification from directorship, potentially harming an individual’s professional reputation and livelihood.

9. Streamlined Communication:

Accurate contact information in the MCA database ensures that regulatory authorities and other stakeholders can effectively communicate with directors when necessary. This is essential for receiving important notifications and updates regarding compliance matters.

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Who needs to file DIR-3 KYC form?

DIR-3 KYC form needs to be filed by every individual who has been allotted a Director Identification Number (DIN) by the Ministry of Corporate Affairs (MCA). This includes both existing and newly appointed directors of companies registered with the MCA. Here are the key points:

1. Existing Directors: Directors who were appointed before the introduction of DIR-3 KYC and have been assigned a DIN must file the DIR-3 KYC form annually to keep their directorship in compliance.
2. Newly Appointed Directors: Directors who are newly appointed to the board of a company and receive a DIN must complete the DIR-3 KYC process within the prescribed timeframe.
3. Disqualified Directors: If a director’s DIN is deactivated due to non-compliance with the DIR-3 KYC requirement in previous years, they will need to rectify the compliance and re-activate their DIN by filing the outstanding KYC forms.

It’s important to note that the DIR-3 KYC form is mandatory for all directors, and non-compliance can result in the deactivation of the DIN, which in turn can lead to disqualification from serving as a director on the board of any company. Therefore, directors must ensure they file the DIR-3 KYC form within the specified due date each year to maintain their eligibility and comply with regulatory requirements.

Documents Required for Directors KYC (DIR – 3 KYC)

To complete the DIR-3 KYC (Director Know Your Customer) process in India, you will need to provide certain documents and information. Here is a list of the documents and details typically required for DIR-3 KYC:

1. Director Identification Number (DIN): You should have your DIN, which is a unique identifier assigned to you by the Ministry of Corporate Affairs (MCA).
2. Permanent Account Number (PAN): Provide a copy of your PAN card, which serves as proof of your tax identity.
3. Aadhaar Card: Submit a copy of your Aadhaar card, which is used for identity verification.
4. Passport-sized Photograph: Include a recent passport-sized photograph of yourself.
5. Email Address: Ensure that your email address is registered and up-to-date with the MCA, as you may receive OTPs (One Time Passwords) for verification purposes.
6. Mobile Number: Similar to your email address, your mobile number should also be registered and current with the MCA for OTP purposes.
7. Digital Signature Certificate (DSC): If you have a digital signature certificate, you may need to provide details related to it.
8. Bank Account Details: In some cases, you may be required to provide your bank account details, including the bank account number, IFSC code, and branch details.
9. Proof of Address (if requested): The MCA may ask for proof of your residential address. Common documents for this purpose include a utility bill (electricity, water, gas), passport, voter ID card, or any other government-issued address proof document.

It’s essential to ensure that all the documents provided are accurate, up-to-date, and in the required format (usually scanned copies in PDF or image format). Additionally, make sure that your contact information with the MCA, including your email address and mobile number, is current to facilitate the verification process.

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Important Check Points while filling up the webform.

 Please read instructions and guidelines carefully before filling online application

• Please ensure that applicant is registered as a business/registereduser on the MCA portalbeforefiling the webform.
• Please ensure that the applicant has valid mobile number and email ID registered on MCAportal against the DIN.

• Please ensure that the applicant has a valid DIN with Status ‘Approved’ or ‘Disqualified’ or ‘Deactivated’ due to non-filing of webform DIR-3
• Please ensure that at least one eform ‘Form DIR-3-KYC’ has been filed against the DIN.
• Please ensure that the DIN is an approved DIN against which webform ‘DIR-3 KYC web’ is not in status ‘Payment incomplete’ or ‘Under processing’ or ‘Approved’ during thecurrent Financial
• Please ensure that in case the DIN status is deactivated, filing shall be allowed only if the reason for deactivation is ‘Non-filing of KYC in DIR-3 KYC’.

• Please ensure no webform DIR-6 should be pending for approval against the
• Please ensure that the DIN entered in thewebform was allotted on or before 31st March of the previous financial
• Please ensure that the applicant verifies the OTP entered for mobile number and email.
• If the space within any of the fields is not sufficient to provide all the information, then additional details can be provided as an optional attachment to the webform.
• Please note no fees is applicable if application for KYC is filed before 30th September by DIN holder who has been allotted DIN on or before 31st March of every year, and whose DIN is in ‘Approved’.

Application Process for Form No. DIR-3-KYC (Web)

Option 1

STEP 1: Access MCA homepage

STEP 2: Login to MCA portal with valid credentials.

STEP 3: Select “MCA services” and further select “E-Filling”.

STEP 4: Select “Company Forms Download” module.

STEP 5: Navigate to the header “DIN related filings”.

STEP 6: Access “Verify Director’s KYC Details (Form No. DIR-3 KYC (Web))”.

STEP 7: Fill up the application.

STEP 8: Save the webform as a draft (optional).

STEP 9: Submit the webform.

STEP 10: SRN is generated upon submission of webform (The SRN can be used by the user for any future correspondence with MCA)

STEP 11: Pay Fees if application for KYC of Directors is filed where DIN status is ‘deactivated’ and the reason for deactivation is ‘Non-filing of KYC in DIR-3-KYC’ (In case the user does not successfully upload the DSC affixed PDF within 15 days of SRN generation and complete the payment within 7 days of successful upload of DSC affixed document or due date of filing of the webform + 2 days, whichever is earlier, the SRN will be cancelled)

STEP 12: Acknowledgement is generated.

 

  Option 2

STEP 1: Access MCA homepage

STEP 2: Access Form No. DIR-3 KYC (Web) through search bar on MCA homepage (website search).

STEP 3: Login to MCA portal with valid credentials.

STEP 4: Fill up the application.

STEP 5: Save the webform as a draft (optional).

STEP 6: Submit the webform.

STEP 7: SRN is generated upon submission of webform (The SRN can be used by the user for any future correspondence with MCA)

STEP 8: Pay Fees if application for KYC of Directors is filed where DIN status is ‘deactivated’ and the reason

for deactivation is ‘Non-filing of KYC in DIR-3-KYC’ (In case the user does not successfully upload the DSC affixed PDF within 15 days of SRN generation and complete the payment within 7 days of successful upload of DSC affixed document or due date of filing of the webform + 2 days, whichever is earlier, the SRN will be cancelled).

STEP 9: Acknowledgement is generated.

FREQUENTLY ASKED QUESTION

1. Who is required to file DIR-3 KYC Form?

Ans: For Financial year 2019-20 onwards – Every Director who has been allotted DIN on or before the end of the financial year, and whose DIN status is ‘Approved’, would be mandatorily required to file form DIR-3 KYC before 30th September of the immediately next financial year.

2. Who can file eForm DIR-3 KYC?

Ans: Any DIN holder who wants to update any information of his KYC details must update the same through filing of eForm DIR-3 KYC only. Please note that no update in details can be made by accessing the web-service for DIR-3 KYC.

 

3. What are details required for DIR-3 KYC?

Ans: Name (as per PAN database), Father’s Name (as per PAN database), “Date of Birth (DoB)” (as per PAN database), PAN Number (mandatory for citizens of India), Personal Mobile number, and Personal Email Address and Permanent/ Present address. Further, Aadhaar is mandatory, if it is assigned. If not, then Voter ID or Passport or Driving License shall be attached. Accordingly, copy of any one of the above selected information is to be attached.

4. What is fee for form DIR-3 KYC?

Ans: Form DIR-3 KYC, if filed within the due date of the respective financial year, no fee is payable. However, if filed after the due date, for DIN status ‘Deactivated due to non-filing of DIR-3 KYC’ a fee of Rs.500(Rupees Five Hundred Only) shall be payable from 21st September to 05th October 2023(Both days inclusive). From 06th October onwards a Fee of Rs.5000(Rupees Five Thousand Only) becomes payable.

5. Whether multiple filing of form DIR-3 KYC is allowed?

Ans: System will not allow multiple filing of form DIR-3 KYC for an applicant. In case KYC is already filed for a DIN, and such DIN is entered again, system throws an error that the form is already filed.