Penalty of Rs.5000 if you have a DIN

Penalty-1 

The Ministry of Corporate Affairs vide Companies(Appointment and Qualification of Directors) Fourth Amendment Rules, 2018, stated that every individual having a DIN/DPIN must comply with the KYC process.  


The compliance of KYC is irrespective of whether the individual is an active Director / Designated Partner in any Company / LLP or not. 

In case of an individual, a penalty of Rs.5000 has to be paid if you have a DIN/DPIN and the KYC process is not completed within 15th September 2018. 

Few common queries answered below: 

 

a) I have a DIN, but I am not a Director in any Company. Do I still need to comply with the KYC process? 

Yes, irrespective of whether you are a Director presently or not, you have to comply with the KYC. 

b) I am not a Director in any company, but I am a Designated Partner in an LLP. Do I need to comply with KYC? 

Yes. Any individual having a DIN/DPIN has to comply with the KYC process. 

c) I was Director in a company and also a Designated Partner in an LLP. Both the entities have been closed. Should I comply with KYC? 

Yes, even if the entities have been closed; the individuals who were associated with the entities as Directors or Designated Partners has to comply with the KYC. 

d) I am a Director in a company but I wish to close the company and never wish to become a Director ever in my lifetime. Do I still need to comply with KYC? 

Yes, if you wish to close the company and do not comply with the KYC process, you shall not be able to file various forms and also you shall not be able to apply for closure of the company.  

e) I have recently incorporated a company, and the date of incorporation was 4th June 2018 and my DIN was allotted on the same date. Should I comply with the KYC? 

No, any individual for whom the DIN has been allotted after 1st April 2018; they do not need to comply with the KYC process. 

f) What if I was allotted a DIN on 31st March 2018. Do I need to comply with the KYC process? 

Yes, if you had been allotted a DIN even on 31st March 2018, you have to comply with the KYC. 

g) I had a company, for which the closure has already been filed, however, the approval for closure has not been received yet. Should I comply with KYC? 

Yes, it is advisable that you comply with the KYC; because in case, the Ministry asks for re-submission of form with various other details, you shall not be able to do the same. 

h) I had a DIN and was a Director of a company. But around 2 years back, I surrendered the DIN. Do I need to comply with the KYC? 

You are advised to check and verify if the DIN has really been surrendered. If you are sure about the same, you shall not be required to comply with the KYC. 

i) I was a Director in a company which has been struck off by the Ministry due to non-filing of Annual Return and I was also disqualified as a Director. Do I still need to comply with the KYC?

Yes, even though you have been disqualified as a Director, you still have to comply with the KYC process. 

j) What will happen if I do not comply with the KYC? 

If the process of KYC is not complied within 15th September 2018, the DIN shall be deactivated. 

k) What will happen if my DIN is deactivated? 

If the DIN is deactivated, you shall not be able to execute documents on behalf of the company unless the same is restored again by paying a penalty of Rs.5000/-

 

Reach us to comply with KYC

 

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