Be KYC Compliant: MCA notifies KYC filing by all directors

It has been observed that Ministry of Corporate Affairs had taken various steps to strengthen the data of the directors associated with the companies. The steps are projected to identify and hold the right person responsible for matters related to companies and to prevent the formation shell companies.

Ministry has recently come up with requirement of annul KYC of all the directors of all companies. By inserting Rule 12A to Companies (Appointment and Qualification of Directors) Rules, 2014, the MCA has mandated all the directors to file the new e-form named DIR-3 KYC.

As notified, all the directors are now required to file DIR-3 KYC annually, failure to which will lead to deactivation of the DIN allotted. As of now, the director who has been allotted DIN on or before 31^st March, 2018 are required to intimate their particulars to Ministry.

Who is required to file form?

Every director holding DIN must file the e-form within time prescribed. The directors include those having “Approved” status and also the disqualified directors.

What is the due date?

For every financial year, the form must be filed before the 30^th April of the next financial year. However, as the directors are also required to file form for KYC of year 2017-18, the due date prescribed was 31^st August, 2018, which is extended by notification dated 21^st August, 2018.

What are the requirements?

The director must ensure following for filing of the DIR-3 KYC form:

1. Unique personal mobile number & e-mail id:

The director must mention his/her own personal number or e-mail id only. Also, using word unique as part of requirement, it also intimate that the number and e-mail id mentioned must not be used for any other KYC form or in respect of any other director.

2. The form must be attested by directors with own DSC:

The e-form must be filed using Digital Signature Certificate of the director only. Further, it is also prescribed that the DSC should be based on PAN of the director. The director being foreign national should have the DSC of which details match with the details filled in form. While filing the form, the data of PAN is verified from the income tax department directly, hence the details entered in DSC must also be same. Further, in case of foreign national, the name would be matched with his/her name entered while filing DIR-3 KYC.

Thus, if the director does not hold the DSC, he/she must procure it confirming the above requirements.

3. The form must be certified by practicing professional:

The form must also be certified by the practicing professional i.e. practicing CA/CS/CMA with their digital signature. The professional certifying the details along with the director is held personally liable for furnishing false details or documents.

What are the documents and details required?

The form must be filed by furnishing documents prescribed with respect to concerned director, i.e.

1. Identity Proof (PAN card or Passport in case of foreign national)
2. Proof of Address (Aadhar card, driving license, voter’s identity card, etc.)

Apart from above documents, following details are to be furnished to MCA:

• Citizenship, Nationality and Residential Status
• The name and other details must be verified with Income Tax PAN
• Aadhar number (mandatory, if allotted)
• Passport Number (mandatory for the foreign nationals)
• Voter’s Identity Card Number
• Driving Licence Number

The unique mobile number and e-mail id would also be verified through One Time Password (OTP) while filing the e-form.

Consequences of non-filing:

As of now, the requirement for filing DIR-3 KYC must be fulfilled up to 15^th September. The DIN of the director, who has not filed the form, shall be deactivated by the central government or assigned authority. Further, once the DIN is deactivated, it can be reactivated only if the e-form DIR-3 KYC is filed by payment of prescribed late or additional fees [see Companies (Registration Offices and Fees) Rules, 2014]. In brief, we can come up with following consequences of non-filing:

• Deactivation of DIN with reason of Non-filing of DIR-3 KYC
• Late fee of INR 5,000 payable on or after 16^th September, 2018 to reactivate the DIN

Conclusion:

This is an alert for all the companies and their associated directors that now the requirement has arisen to make sure all the compliances are fulfilled properly and on-time without. The consequences and delays would make the company and stakeholder face not only the penalties but also severe consequences being in radar of MCA.

With respect to this filing, the stakeholders must note that it is not one-time filing; rather it is an annual requirement. Although the e-form is yet to be deployed, you must take care not to miss on approaching deadline and complete filing on priority with the help of professional as soon as it is deployed.

LegalWiz.in, your trusted legal partner is here to help you with this requirement also. Contact team professionals at LegalWiz.in to file DIR-3 KYC at nominal cost. Write us at support@legalwiz.in for more information and professional assistance.