DIR 3 KYC latest update 24th March 2020
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Ministry of Corporate Affairs (MCA) has notified Companies ((Appointment and Qualification of Directors) fourth Amendment Rules, 2018. These Rules shall came into effect from 10th July, 2018. The Two major amendments that are done -
- All the directors who are allotted with DIN on or before 31st March 2018, have to file DIR 3 KYC in order to keep their allotted DIN as “active”, if not filled then MCA will mark all approved DINs as ‘Deactivated’ with reasons as ‘Non-filing of DIR-3 KYC’
- The companies incorporated on or before 31st December 2017, were required to verify their registered office by filling a form named ACTIVE (Active Company Tagging Identities and Verification) on or before 15.06.2019. If not filled then MCA will mark all the companies as “ACTIVE-non-compliant” with reasons as ‘non-filing of ACTIVE eform’
Now, the timelines for both the filings are lapsed, if a director have to file the ACTIVE e-from or DIR 3 KYC then have to give penalty of INR 10,000 and 5000 respectively.
MCA has come with a sound of relief in the penalties with a latest update –
Latest Announcement DIR 3 KYC
DIN holders of DINs marked as ‘Deactivated’ due to non-filing of DIR-3KYC/DIR-3 KYC-Web and those Companies whose compliance status has been marked as “ACTIVE non-compliant” due to non-filing of Active Company Tagging Identities and Verification(ACTIVE) eform are encouraged to become compliant once again in pursuance of the General Circular No. 11 dated 24th March, 2020 & General Circular No.12 dated 30th March 2020 and file DIR-3KYC/DIR-3KYC-Web/ACTIVE as the case may be between 1st April, 2020 to 30th September, 2020 without any filing fee of INR 5000/INR 10000 respectively
In order to remove the tag of Active-non compliant status, then company has to file for ACTIVE e-form, with the penalty of Rs. 10,000. And in order to remove the tag of De-activated DIN, director has to file DIR-3 KYC form with a penalty of Rs. 5000.
Also, if any director’s DIN is deactivated they are not eligible for filing of any company compliance. Therefore, it becomes necessary for a director to change their DIN status from de-active to active by filing of DIR-3 KYC.
With the circular No. 11 dated 24th March, 2020, MCA has provided the company and their directors with another chance for filing of DIR 3 KYC and ACTIVE (Active Company Tagging Identities and Verification) without any penalty.
As per this notification, if the filling will be done on or before 30th September, 2020 there will be no penalty
What is Director Identification number (DIN)
- DIN is a unique identification number given to theapplicant who wants to be a director or an existing director of a company.
- It can be obtained by a application in eForm DIR-3. This is one time process and is allotted only once in a lifetime. In case a person wants to be director in more than one company, the same DIN can be used in multiple companies.
- However, now with the new updates all directors with a DIN will have to submit their KYC details annually in eForm DIR-3 KYC.
Effect of Non-Filing of DIR 3 KYC on Director:
Following are the impacts on Directors if there DIN are in de-active status as per MCA records:
- The person can’t be appoint as director in any new Company or LLP.
- He is not permit to resign from any Company or LLP from the existing company.
- He has no right to mention his DIN on any document in related to Company
- Can’t use his DSCs in any filing including MCA compliance.
Effect of Non-Filing of DIR 3 KYC on Company:
Following are the impacts on company, if directors DIN are in de-active status as per MCA records:
- Company is liable to file any annual compliance form like AOC-4 and MGT-7 with ROC.
- Company can’t file any form with DSC of director whose DIN has been deactivated.
- Company is not allowed to get any document signed from such Director whose DIN is de-active
- Company is not allowedto mention the DIN no. of such Director whose DIN is de-active
What is Active Company Tagging Identities and Verification(ACTIVE)?
ACTIVE (Active Company Tagging Identities and Verification) is a new compliance update from MCA. The filing of this mandatory for all the companies which are incorporated on or before 31st December 2017.
All the organisations (whether private limited, public limited, OPC, or LLP) registered on or before 31st December 2017 were required to file this form before 25th April 2019. This timeline is now lapsed.
Non Filing e-Form ACTIVE
Ifa company has failed to fileACTIVE form (named INC-22A) on or before the said date, the status of such companies has marked as ‘ACTIVE Non-compliant’.
Also, the Director Identification Number (DIN) of all the Directors of any such ‘ACTIVE non-compliant’ companies, are marked as ‘Director of ACTIVE non-compliant company’
Effects of Non Filing e-Form ACTIVE
- The Company will be marked as “ACTIVE-non-compliant.
- A penalty of INR 10,000will be levied for late filing of ACTIVE (INC-22A).
- No request will be accepted by ROC for amending any event based information or changes. This can include -
- SH-07 (Change in Authorized Capital);
- PAS-03 (Change in Paid-up Capital);
- DIR-12 (Changes in Director except cessation);
- INC-22 (Change in Registered Office);
- INC-28 (Amalgamation, de-merger)
- The ROC may conclude that the company is not carrying on any business or operations
- A physical verification can be done by the ROC at the registered office of the company if required.
- The Registrar has a right to initiate action for the removal of the name of the company from the register of companies
It’s a mandate for all the companies to fulfil the MCA compliances on time. This filing also include the latest amended compliances. Any failure in this may result in heavy penalties and further disqualification of directors even the companies. It’s always better to take an expert advice to avoid such penalties.