Director Identification Number

All current and incoming directors (or prospective directors) of a firm must have a "Director Identification Number" (DIN). A DIN number is assigned following the change to the Companies Act. All directors are given an 8-digit Unique Identification Number. It is applicable for life. The Form DIR-3 is processed and authenticated by the national government and its designated authority, MCA , when received. Their considerations include, amongst many other considerations, the requirements outlined in Section 154 of the Companies Act, 2013 and Rule 10 of the Companies Rules 2014 (Appointment and Qualifications of Directors) while determining whether or not to grant a DIN number to an applicant

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By considering these rules and restrictions, the form will be completed and the DIN number will be assigned within a month of submission. To approve or reject the form, the central government and its delegated authority must correspond with the applicant via digital means or any other contact mode that they deem appropriate. The Central Government must provide the applicant's Allotted DIN number within one month of applying. That is the method by which a DIN is assigned to an individual.

What is the purpose of a DIN?

The Director Identification Number gives each director a distinct identification and aids in managing all director data and information in a database.  In recent years, chit fund companies in various Indian towns have promised people unbeatable profits before fleeing with their wealth to some other location.

The government created the DIN to enable the cross-checking of such individuals and confirm that the director's identity is authentic and that all data supplied is accurate. As a result, the DIN database will include all data on the directors, including their name, PAN number, and current address. Any changes to the location or other data must be corrected as soon as possible.

The best thing about DIN is that it may be used for life, regardless of how many businesses an individual establishes. This implies that the DIN is unique to the person who acquired it, not to the organization from which he or she received it.

For example, if a director of one business registers for a DIN number and then wishes to form a new firm and serve as a director, he could do so using the same DIN number.

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What is the procedure for the allotment of DIN?

The procedure for applying for the assignment of a DIN number is straightforward. It is laid down in Section 153 of the Companies Act, 2013 and Rule 9 of the Companies Rules, 2014, which outline the procedure for applying for the allocation of a DIN number in the Ministry of Corporate Affairs.

1. Visit the MCA website and click on MCA Services
2. Click on e-filing and on next page fine DIR-4 under DIN forms which is to be downloaded.
3. Fill the form with necessary details. The required documents are:
   1. Recent Photograph
   2. Government ID proof
   3. Proof of residence
   4. Verified Signature
4. The required documents are to be signed using the DSC. The documents also need a verification from a professional such as CS, lawyer, CEO etc.
5. Form to be submitted using the prescribed fees.

Cancellation or Surrender of DIN

The Ministry of Corporate Affairs has the authority to deactivate DINs for various reasons. Non-compliance with KYC (Know Your Customers) regulations, which were previously established by the MCA, is one of the most prevalent causes for deleting a DIN number. In the event of non-compliance with KYC regulations on an annual basis, the MCA has the authority to deactivate a DIN due to KYC violations.

Furthermore, the deactivation of a business's DIN can be accomplished if the company fails to file its annual financial statements and annual return with the company registrar for three years consecutively. In such cases, the company will be struck off the register of companies by the registrar of companies, and the DIN of the directors will be deactivated for the time being.

Voluntary Surrender

The Director Identification Number (DIN) can be voluntarily surrendered for cancellation or deactivation after obtaining it if the person was never assigned as a director in a company. The DIN in discussion has not been used to file any records with any authority.

It will be necessary for the DIN holder to file an electronic form DIR 5 with an accompanying declaration stating that he, despite having the DIN, has never been appointed as a director in any company and that the DIN which has been surrendered has not been used to communicate with any regulatory authority. When the MCA officials have concluded their verification, the deactivation of the DIN will take effect.

It is not always the case that a DIN must be surrendered only when an order is received by the Central Government; instead, it can sometimes be relinquished willingly by the DIN holder in question. Compared to relinquishing DIN by Central Government order, the process is simpler and less time-consuming when using this method of obtaining a DIN. To avoid confusion, the director who surrenders the DIN should state the reasons for doing so.

Duplicate DIN obtained by same person

The data associated with both DINs would be linked with the data associated with the legitimately kept number if it is discovered that the DIN has been replicated by the same individual. 

It is prohibited for an individual who has been assigned a DIN under Section 154 to apply for, obtain, or hold another DIN, according to the provisions of Section 155 of the Companies Act 2013. According to Section 159, if any individual or director of a company fails to comply with Sections 152, 155, and 156, such individual or director of a company will be subject to a penalty that can range up to fifty thousand rupees. If the default is a continuing one, a further penalty that can range up to five hundred rupees for each day after the first during which the default continues will be levied against such individual or director of a company.

Also, read The Unique Identity Of A Company Director As Per The Company Law.

There are certain exceptional circumstances where the Director Identification Number should be surrendered.

• DIN holder declared as a Person of unsound mind;
• DIN holder adjudicated as Insolvent; and
• Death of the DIN holder.