The Know Your Customer (KYC) process is a critical requirement for companies in India, particularly concerning the directors of the company.
DIR-3 KYC
The Know Your Customer (KYC) process is a critical requirement for companies in India, particularly concerning the directors of the company. Mandated under the Companies Act 2013, the KYC process helps maintain transparency and accountability within corporate governance.
From the Financial Year 2019-20 onwards, it is mandatory for every director who has been allotted a DIN on or before the end of the financial year and whose DIN is in approved status, will have to file form DIR-3 KYC before 30th September of the immediately next financial year.
CONSEQUENCE OF NOT FILING E-FORM DIR-3 KYC WITHIN THE SPECIFIED DUE DATE
In case a director who is supposed to file the e-Form does not file it by 30th September on MCA 21 portal, the department will mark the DIN of such director as ‘Deactivated due to Non-filing of DIR-3 KYC’.
If the director wishes to re-activate his/her DIN in future by filing the missed out e-Form DIR-3 KYC, he can do so after paying a late fee of Rs 5,000. This fee would be payable on or after 30th September of the year in which the e-Form DIR-3 KYC (Web) is to be filed. This form needs to be filed annually by the directors.
Documents Required For KYC
As per the Companies Act 2013, the following documents are mandatory for the KYC of directors:
Document Type | Description |
PAN Card | Permanent Account Number to establish identity and tax status. |
Aadhaar Card | Proof of identity and address. |
Passport-sized Photograph | Recent photograph for identity verification. |
Address Proof | Utility bill, bank statement, or lease agreement. |
Email ID | Valid email address for communication purposes. |
Phone Number | Contact number for verification and updates. |
Passport | Passport, if issued. |
DSC | Digital Signature Certificate (DSC) of the director filing the form (applicant). |
DSC, membership number, certificate of practise number from a practising professional, such as CA, CS, or Cost Accountant | |
KYC Process For Directors
The KYC process for directors involves the following steps:
Step 1: Gather Required Documents
Collect the necessary documents as listed above.
Step 2: Fill out Form DIR-3 KYC
Directors must fill out the Form DIR-3 KYC available on the Ministry of Corporate Affairs (MCA) website.
Step 3: Submit the Form
Submit the completed form along with the required documents to the Registrar of Companies (RoC).
Step 4: Verification
The RoC will verify the submitted information and documents.
Step 5: Issuance of KYC Compliance Certificate
Upon successful verification, a KYC Compliance Certificate will be issued.
Types Of KYC
There are two types of e-Form DIR-3 KYC, which are as follows:
DIR-3 KYC – Any director who is filing e-Form DIR-3 KYC for the first time after allotment of DIN or whose details are required to be updated/changed must file this form.
DIR-3 KYC (Web) – Any director who has already filed the e-Form DIR-3 KYC/DIR-3 KYC (Web) in the previous year can file this form when there is no change in his/her KYC details. In this e-Form, the basic details of the director will be pre-filled from the MCA data and, thus, cannot be changed.
Conclusion
KYC for directors is not just a regulatory requirement but a vital step towards ensuring corporate governance and trust. By adhering to the KYC guidelines as outlined in the Companies Act 2013, companies can protect themselves from potential legal issues and foster a transparent business environment.
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