Form DIR-5 : Surrendering A DIN

[Ishita Ramani]

Introduction

A DIN, or Director Identification Number, must be obtained for everyone who holds a position as a director or partner of a company or LLP (Limited Liability Partnership) that is registered in India. Therefore, as part of the business registration or LLP incorporation process, DIN is obtained after getting the digital signature of the intended director or partner. A DIN can occasionally be obtained mistakenly for someone who already has one. The material on this page will help you understand “What is DIN?”, “Why is it necessary to surrender DIN?,” what information must be included in Form DIR-5, and what documentation is needed for Form DIR-5 for Surrendering of DIN.

What is DIN?

The law allows a person who wishes to become a director to acquire one DIN because it is connected to their Permanent Account Number (PAN) or passport. By obtaining a single DIN, a person who wants to become a director can do so in multiple businesses. So, before acquiring a DIN or at any time when applying for a DIN, the interested party may check the DIN database to discover if they have ever obtained a DIN from the Central Government.

The Central Government has also established a checking mechanism whereby, prior to allotting any DIN, it also runs a check and confirms the data provided by the applicant through its database in order to address the problem of one application receiving many DINs. As a precaution, it is better for the potential applicant to check the MCA portal to find out if he has ever been issued a DIN.

The present application will be declined and no new DIN will be granted if the applicant’s history of any past DINs is found. If records show that the applicant owns more than one DIN, they will come to the attention of the Central Government. The applicant would be asked to pay a fee for disobeying the law, reject all but one of his DINs, and provide reasons for keeping all of the others.

Why is it necessary to turn in a DIN?

1. DIN obtained dishonestly or improperly

The regulatory authorities may deactivate the DIN after providing the director a show-cause notice if a director who obtained a DIN through the provision of false information or in an illegal manner surrenders the DIN.

2. Whenever a director is deemed bankrupt

The director must give up his DIN by filing Form DIR-5 together with the ruling of the court if he is found to be insolvent.

3. Director Identification Numbers in multiples

If a Director has more than one DIN, he must submit a Form DIR-5 application to the Regional Director in accordance with Section 153 of the Companies Act of 2013, along with a notarized affidavit stating that the additional DIN has never been used in any document type that must be submitted to the ROC. A compounding application must also be submitted in Form GNL-1.

4. Whenever a director becomes incompetent

According to Section 153 of the Companies Act, 2013, if a court of competent jurisdiction declares a director to be mentally incompetent, the DIN shall be surrendered by completing Form DIR-5 with the court’s order attached.

Documents needed to submit Form DIR-5

In order to surrender their DIN, the applicant must include the following documents to Form DIR-5.

• Identity proof (such as a PAN, voting card, or Aadhar card).
• Address Proof (Driving license, ration card, electricity bill, or any other).
• Documentation should not be older than two months as of the eForm submission date if the applicant is an Indian.
• If the person submitting the application is from outside the United States, the address proof must be older than a year as of the eForm submission date.
• If a director is found to be bankrupt or mentally ill, the court will issue an order.
• Certificate of Death (if the director is deceased).

A distinctive name must be chosen, digital signature certificates and Director Identification Numbers must be obtained, the registration application must be submitted to the Registrar of Companies, fees must be paid, and a Certificate of Incorporation must be obtained as part of the LLP registration process. Following that, an LLP agreement is signed outlining the duties and responsibilities of the partners. A seamless registration process may benefit from expert advice.

Conclusion

The procedure for surrendering a DIN is quite simple, but the DIN holder must make sure that the director hasn’t been appointed to any company or other legal entity while in possession of a DIN and that the DIN that is being surrendered hasn’t been used in any documents that are being submitted to a regulatory authority before submitting an application for surrender in Form DIR-5. The introduction of E-form DIR-5 has greatly simplified, made transparent, and speed up the process of relinquishing a DIN.