Importance of DIR-3 KYC Filing
The Ministry of Corporate Affairs (MCA) has made mandatory compliance requirements for all the DIN holders to file the form DIR-3 KYC, before 30th September, for the financial year 2019-20. MCA issues directors Identification Number (DIN) to those individuals who are appointed as a director of any company or is a partner of LLP incorporation. No government fees are to be paid for the compliance for any Indian or Foreign national with a verified DIN in our country.
For all the approved DIN holders, they must file form DIR-3 KYC every financial year, starting from 2019-2020. This clarification was given by the Ministry of Corporate Affair s(MCA) on 13th April 2019. This step was taken to ensure that the directors avoid holding multiple DINs, and thus the system would detect multiple filing and wouldn’t accept so.
KYC is done as a precaution against illegal activities like corruption, money laundering or bribery and thus is mandated as per the RBI norms.
Through this mandated process, MCA is hopeful that it can help in establishing transparency and accountability. When the deadline was extended from 10th July 2018 to 30th September 2018, it was found that almost 21 lacs DINs were not KYC complied out of 33 active directors across the country. Thus, MCA deactivated DINs due to its non-compliance.
Fees and Penalties
As per the policies of the Ministry of Corporate Affairs (MCA), those non-compliant DIN holders, i.e. those DIN holders whoever fails to file the DIR-3 KYC form in the respective financial year were marked as “Deactivated due to non-filing of DIR-3 KYC’.
However, MCA accepts DIN filing at a fee of INR 500 for any valid DIN that agreed to comply with KYC, payable before 5th October of the same year.
DIN holders who are marked as Deactivated by the Ministry of Corporate Affairs have an extended time of 30th September 2020 without a fee. However, after 5th October, the director will attract a penalty of Rs 5000 for filing the DIR -3 KYC.
How to File DIR-3 KYC Form?
- Visit the site Ministry of Corporate of Affairs to login to your MCA account.
- In your MCA account go to the DIN services, enter your DIN no. and submit
- After the submission of the DIN number, the website generates the OTPs for email id and mobile no.
- Entering the OTP received through SMS to confirm their details are appearing on the screen.
- The generation of a zero-rupee challan will follow it.
- Finally check the SRN status for establishing whether the KYC is verified or not.
Consequences of Non- compliance of DIR-3 KYC
- A penalty fee of Rs 5000 is applicable after the 5th October and before 5th October is INR 500.
- Deactivation of DIN as a result of failing to file DIR-3 KYC (applied if out of compliance), invalidating any action by the Partner by using the DIN
- Non-filing of KYC will also result in the inability to be appointed as Director or Designated Partner in a company.
Documents and Information Required for Filing the KYC
- Name along with the other details, must be verified with the PAN Card.
- Aadhar card
- Citizenship, Nationality and Residential Status
- The passport number is mandatory for the foreign nationals filing KYC
- Voters Identity Card Number
- Driving License Number
- Both the email id and unique mobile number is also verified through One Time Password (OTP) while filming the e-form
Note: Apart from the documents mentioned above, you need to check whether you are having the following:
- The digital signature of the person who is filing the form.
- The person must produce an attested declaration issued by any practising professional.
- The documents mentioned above should be certified by a practising professional like CA, Cost Accountant or CS.
- The papers should be certified and verified by the prescribed professional in the case of a foreign national.
3E Accounting handles the company registration process and helps small and medium-sized businesses to comply with MCA. We will ensure that you are never non-compliant and always file the form within the deadline.