DIRECTOR IDENTIFICATION NUMBER

[Mr. M. GOVINDARAJAN]

The concept of a Director Identification Number (‘DIN’ for short) has been introduced for the first time with the insertion of Sections 266A, 266B, 266C, 266D, 266E, 266F and 266G of Companies (Amendment) Act, 2006.

PROVISIONS UNDER COMPANIES ACT:

Section 266A of the Companies Act, 1956 (‘Act’ for short) provides that every individual, intending to be appointed as director of a company or director of a company appointed before 1.11.2006 shall make an application for allotment of DIN to the Central Government in such form and manner (including electronic form) along with such fee, as may be prescribed. Every applicant, who has made an application under this section for allotment of DIN, may be appointed as a director in a company, or hold office as director in a company till such time such applicant has been allotted DIN.

Sec. 266B of the Act provides for allotment of DIN. According to this section the Central government shall within one month from the receipt of the application under Sec. 266A of the Act, allot a DIN to an applicant in such manner as may be prescribed.

Sec. 266C prohibits obtaining more than one DIN. It provides that no individual, who had already been allotted a DIN under Section 266B shall apply obtain or possess another DIN.

Section 266D imposes an obligation on the Director to intimate DIN to concerned company or companies. This section provides that every existing director shall, within one month of the receipt of DIN to the company or all companies wherein he is a director.

Section 266E imposes an obligation on the part of company to inform DIN to Registrar of Companies. This section provides that every company shall, within one week of the receipt of intimation under Section 266D, furnish the DIN of all its directors to the Registrar or any other officer or authority as may be specified by Central Government.

Section 266F imposes an obligation to indicate DIN. It provides that every person or company, while furnishing any return, information or particulars are required to be furnished under this Act, shall quote the DIN in such return, information or particulars relate to the Director or contain any reference of the director. taxmanagementindia.com

Section 266G provides penalty for contravention of provisions of Section 266A, or Section 266C or Sections 266D or Section 266E.  This section provides that if any individual or director, referred to in Section 266A or section 266C or Section 266D or a company referred to in Section 266E, contravenes any of the provisions of those sections, every such individual or director or the company, as the case may be, who or which, is in default, shall be punishable with fine which may extend to Rs.5000/- and where the contravention is a continuing one, with a further fine which may extend to Rs.5000/- for every day after the first during which the contravention continues. 

COMPANIES (DIN) RULES, 2006:

The Central Government made Companies (Director Identification Number) Rules, 2006 which came into effect from 1.11.2006. 

Rule 2(ii) defines the term ‘Director Identification Number’ as identification number which the Central Government may allot to any individual, intending to be appointed as director or to any existing directors of a company, for the purposes of his identification as such.

Procedure for getting DIN:

• Every individual, who is an existing director or intending to be appointed as director of a company shall make an application electronically to the Central Government for allotment of DIN in Form No. DIN-1;
• The Central Government shall provide an electronic system to facilitate submission of  application for the allotment of DIN through a portal on the website of the Ministry;
• The applicant shall access the Form DIN-1 from the portal, fill in the required particulars sought therein and use ‘submit’ function provided therein upon which the system will electronically generate and indicate in the space provided a provisional DIN;
• A provisional DIN generated will remain valid for a period of 60 days from the date on which it was generated;
• The applicant shall after the allotment of provisional DIN, submit a formal application to the Central Government along with a fee of Rs.100/- for the allotment of regular DIN within 60 days from the date on which the provisional DIN was generated on line, failing which the provisional DIN will lapse;
• The applicant shall affix his photo and enclose  true copies of proof of identity and proof of residence which shall be certified by any one of the following:
  • Gazetted officer of the Central or State Government;
  • Notary public;
  • Chartered Accountant, Company Secretary, Cost & Works Accountant holding a certificate of practice;
  • Company Secretary in full time employment.
• The Central Government shall process the application, decide on the approval or rejection thereof and communicate  the same along with DIN allotted in case of approval to the applicant by way of a letter by post or in any other mode within a period of one month from the date of receipt of application;
• The DIN is valid for the life time of such applicant and shall not be allotted to any other person during his life time.

Obligations:

• Every existing director shall, within one month of the receipt of DIN, intimate his DIN to the company or all companies, wherein he is a director, in Form No DIN-2;
• Every company shall furnish the details of DIN within one week of receipt of intimation from directors, to the Registrar in Form No. DIN-3 in electronic form along with fee as prescribed under Schedule X of the Act and duly certified by a Company Secretary in full time employment of the concerned company or by a Company Secretary in full time practice;
• Every director, in the event of any change, shall intimate such change or changes to the Central Government within a period of 30 days of such change(s) in particulars by using Form No. DIN-4 online.   He shall intimate such changes to company or companies on which he is a director;
• The changes are to be filled in DIN-4, signed in space provided along with copy of proof for changed particulars duly certified by any one of the authorities mentioned above;
• The Central Government, upon being satisfied, through verification of such changed particulars from the enclosed proof, shall incorporate the said changes and inform the director by way of a letter issued by post or electronically or in any other mode confirming the effect of such change in the electronic database maintained by the Ministry.

Grounds for rejection:

• The DIN application fee is not paid ;
• Non-submission of supporting documents;
• The proof of identity of the applicant is not submitted; 
• The proof of father's name of the applicant is not submitted; 
• The proof of date of birth of the applicant is not submitted; 
• The proof of residential address of the applicant is not submitted; 
• The Affidavit (for applicant or his/her father's name being a single name) is not submitted; 
• The copy of passport (for foreign nationals) is not submitted;
• Invalid Application/supporting Documents ;
• The supporting documents are invalid or expired; 
• The proof of identity submitted has not been issued by a Government Agency;
• The application/enclosed evidence has handwritten entries.  The submitted application is a duplicate DIN application and already one application of that applicant is pending or approved;
• The submitted application does not have photograph affixed;
• The signatures are not appended to the prescribed place; 
• The applicant's name filled in application form does not match with the name in the enclosed evidence;
• The applicant's father's name filled in application form does not match with the father's name in the enclosed evidence; 
• The applicant's date (DD/MM/YY) of birth filled in application form does not match with the date of birth in the enclosed evidence; 
• The address details filled in the application do not match with those contained in the enclosed supporting evidence;
• The prefixes/ suffixes like Mr./Ms./Kumari/Shri/Late/Ji etc. are used in the applicant's name or applicant's father's name field in Form DIN-1;
• The gender is not entered correctly in Form DIN-1;
• Identification number entered in application does not match with the identity proof enclosed;
• The application does not contain the valid Service Request Number (SRN) through which the DIN application fee is paid; 
• Improper Attestation of documents;
• The attesting authority has not put his signature; 
• The documents have not been attested by authorized person; 
• Applicant's photograph has not been attested by an authorized person; 
• The proof of identity has not been attested by an authorized person;
• The proof of father's name has not been attested by an authorized person; 
• The proof of date of birth of the applicant has not been attested by an authorized person; 
• The proof of residential address has not been attested by an authorized person;
• The particulars of the attesting authority are incomplete (e.g. professional's name, designation, membership number, stamp/seal).

AUTHORITY TO ISSUE ‘DIN’:

Vide Notification No. GSR 650(E), dated 19.10.2006, the Central Government has delegated the powers and functions of the Central Government in respect of allotment of DIN under Section 266A and 266B of the Act to the Regional Director, Joint Director, Deputy Director or Assistant Director posted in the office of Regional Director, Northern Region.

OTHER ISSUES:

• DIN – 1 and DIN -4 have to be digitally signed by the practicing Charted Accountant/Company Secretary/Cost Accountant who shall also verify the particulars of the applicant given in the application;
• PAN number of the applicant shall invariably be furnished;
• Initially, in addition to DIN, DPIN (Designated Partnership Identification Number) was issued to designated partner in an LLP.  Later DPIN issued was cancelled.  DIN obtained by a person may also utilize the same for the purpose of LLP;

NEW COMPANY BILL:

New Company Bill was passed by Lok Sabha.  Section 153 deals with filing of application for allotment of DIN. Section 154 provides for allotment of DIN.  Section 155 prohibits obtaining more than one DIN. Section 156 imposes an obligation on director to intimate DIN to the company or companies in which he is a director. Section 157 imposes an obligation on company to inform DIN of directors to Registrar of Companies. Section 157(2) provides punishment if a company fails to furnish DIN before the expiry of the period under Section 403 along with additional fee and the company shall be punishable with fine which shall not be less than Rs.25,000/- but which may extend to Rs.1 lakh and every office of the company who is in default shall be punishable with fine which shall not be less than Rs.25,000/- but which may extend to Rs.1 lakh.  Section 158 imposes an obligation to indicate DIN in all returns, information or particulars. Section 159 provides punishment for contravention any of the provisions of Section 152, Section 155 and Section 156. It provides that such individual or director of a company who contravene the above said sections shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to Rs.50000/- and where the offence is a continuing one, with a further fine which may extend to Rs.500/- for every day after the first during which the contravention continues.