DIR 3 KYC

Overview

‘Know Your Customer’ is referred to as KYC. When conducting business with a bank or other financial institution, the client’s correct identity is confirmed by verifying their documents such as PAN, Passport, utility bills, etc.

The Ministry of Corporate Affairs (MCA) recently announced the launch of a new form called DIR-3 KYC, which requires every Director with a Director Identification Number (DIN) to update their personal information once a year.

To those who wish to serve as company directors, a unique identification number known as a DIN is granted. A person who now serves as a corporate director is also awarded it. A DIN application is submitted from DIR-3, initially intended to be a one-time assignment for the Director. 

Purpose of dir 3 KYC

Every person with a Director Identification Number, regardless of whether they are a resident, a non-resident, or a foreign national, must submit the electronic form DIR-3 KYC. The DIN holder must still submit Form DIR-3 KYC even if they are not a Designated Partner in an LLP or a Director in a company. Originally intended to be used just once, The MCA now requires that this electronic form be submitted on April 30 of each fiscal year.

The primary reason for submitting the DIR-3 KYC form is to perform an annual KYC of the directors of all businesses and LLPs. By doing this, all directors who hold DINs will have their information updated in the ministry of business affairs database. Data must be disclosed, including the directors’ addresses, phone numbers, and email addresses. This information is beneficial, primarily when the government seeks to track down a Director or Designated Partner for any violations of the law or fraud that they may have committed.

Every year, as part of updating their registers, the MCA has mandated that all directors having DINs submit their KYC data using e-Form DIR-3 KYC. It is one of the most significant good corporate governance steps the government has done to eliminate sham firms and dishonest directors.

Who needs to file DIR-3 KYC?

• Any director, who currently has a DIN, has one assigned to them or whose DIN is in the ‘Approved’ position.
• Directors disqualified by DIN must adhere to the requirement mentioned above.

Starting with the 2019–20 fiscal year, a Director who receives a DIN on or before the end of the fiscal year and whose DIN status is authorized must complete form DIR-3 KYC by April 30 of the fiscal year that follows.

Fees for filing form DIR-3 KYC

No fee is owed if Form DIR-3 KYC is submitted by the deadline for the applicable fiscal year. However, late filing will result in the DIN status “Deactivated owing to non-submission of DIR-3 KYC,” which would need payment of a cost of Rs. 5000/-.

Due date for filing DIR-3 KYC

Yearly submission of this form is required to the MCA. According to Rule 12A of the Companies (Appointment and Qualification of Directors) Regulations, 2014, every person assigned a DIN as of the March 31 of a financial year shall submit his KYC on or before the September 30 of the financial year that follows. 

The system will only permit an applicant to submit form DIR-3 KYC once. The system throws an error stating that the document has already been filed if KYC has already been submitted for a given DIN and that DIN is entered again.

Penalty for not filing dir 3 KYC

A DIN will be listed as “Deactivated owing to non-filing of DIR-3 KYC” if the DIN holder fails to submit his annual KYC by the deadline of each fiscal year. It can only be reactivated if the form DIR-3-KYC 3/DIR-3-KYC Online is submitted with the required fee of Rs. 5,000 or any other sum as determined by the Companies (Registration Offices and Fees) Regulations, 2014, from time to time.

Documents required to file dir 3 KYC

A few documents, including ones that support the citizenship, gender, and birth date claims, are needed to complete the DIR 3 KYC Form. You also need the following other crucial documents:-

• Permanent Account Number (PAN)
• Voter identification card
• Residential address Proof
• Driving license.
• Aadhaar card.
• Passport (mandatory if the person holding the DIN is a foreign national). 

You will also require the following in addition to the ones mentioned above:

• Digital signature of the applicant.
• The signatures of licensed specialists such as cost accountants, CAs, or CSs attest to the legitimacy of the files mentioned above. The appointed authorities must certify documents in the case of foreign nationals.
• The petitioner must provide a declaration that has been attested to by authorized individuals.

Steps to file dir 3 KYC

Step 1: Download the Form.

First, get the DIR-3 KYC form from the MCA website.

Step 2: Enter the DIN data

The directors must fill out the ‘Approved’ status for the DIN in the KYC form. The DIN goes inactive for directors who need to keep track of the DIR-3 KYC Forms. However, directors may submit the form after the deadline by paying a late filing charge.

Step 3: Provide the necessary information on the DIR-3 KYC Form 

The candidate must include both their first and last name and their father’s first and last name.

• Nationality – A director will need to acknowledge their nation of origin. Directors who are of a different nationality are required to state their passport nationality.
• Age Verification – The DIR-3 KYC Form requires the Director’s date of birth (DOB) in the following format: DD/MM/YYYY. Because applicants under the age of 18 are unable to submit this application and hence cannot serve as directors, an age declaration is necessary.
• Address – The person must disclose their permanent address if it differs from their present residence address.

Step 4: PAN Verification 

To file a DIR-3 KYC, the PAN must be verified. The “Verify Income-tax PAN” button should only be selected after the Director has registered the PAN. After that, the system will utilize the PAN card number to check the Director’s details.

Step 5: Update your contact details and confirm OTP

When the Director updates their contact information, an OTP is used to validate their mobile number and email address. When a director enters the contact information listed above, he must produce an OTP to confirm the data entered by clicking the ‘Generate OTP’ button after submitting the information. OTPs are issued separately to email and mobile devices.

Step 6: e-Form Authentication

Directors must guarantee that the e-form has been authenticated. It indicates that a Company Secretary or Chartered Accountant currently connected to their area of employment has digitally signed the document. Including the practising professional’s contact information and digital signature is a crucial step that must be taken.

Step 7: Generation of SRN

The SRN (Service Request Number) generation occurs once the e-Form, DIR-3 KYC, has been correctly submitted. This SRN is provided to the user for upcoming communications with the MCA.

Step 8: Email Correspondence

A message confirming the form’s receipt will be sent to the applicant’s email address. The submission of eForm DIR-3 KYC is complete once you get the approval email.