Procedure for Obtaining Directors Identification Number (DIN) by Foreign National

Khushboo Sharma

Khushboo Sharma

Published on: Dec 1, 2023

Darshi Dave

Updated on: Dec 1, 2023

★★★★★(3 Rating)

2091

INTRODUCTION:

Director Identification Number (DIN) refers to an identification number allotted by the Central Government to any individual, intending to be appointed as a director or to any existing director of a company, for the purposes of identification as a director of the company. Such Director Identification Number (DIN) shall also include a Designated Partnership Identification Number (DPIN) issued under section 7 of the Limited Liability Partnership Act, 2008) and rules made thereunder. [Rule 2(1)(d) of the Companies (Appointment and Qualification of Directors) Rules, 2014]

The Ministry of Corporate Affairs vide the Companies (Appointment and Qualification of Directors) Amendment Rules, 2022 (dated: June 01, 2022) has notified that where any person who applies for Director Identification Number is a national of a country which shares land border with India, is required to attach security clearance from the Ministry of Home Affairs, Government of India along with the application for Director Identification Number and no application number for the allotment of Director Identification Number shall be generated unless the requisite attachment has been attached.

RELEVANT SECTIONS AND RULES:

1. Section 153, 154, 155, 156, 157, 158, 173 of Companies Act, 2013
2. Rule 8, 9, 10, 10A, 11, 12A of Companies (Appointment and Qualification of Directors) Rules, 2014

MANDATORY REQUIREMENTS:

• Application for allotment of Director Identification Number (DIN) for appointment in a new company:
  Application for allotment of Director Identification Number to be made only through SPICe e-form at the time of the incorporation of new company.
• Application for allotment of Director Identification Number (DIN) for appointment in an existing company:
  1. The company shall pass a Resolution in a duly convened meeting for the appointment of a Foreign National as a Director in the company.
  2. All the supporting documents submitted along with the DIN application including photograph shall be certified by the Indian Embassy or a notary in the home country of the applicant or by the Managing Director / CEO / Company Secretary of the company registered in India, in which applicant wants to be appoint as a director.
  3. The concerned director is required to make a declaration pertaining to the disqualifications specified in the provisions of the Act.

PROCEDURE:

• The following procedure is to be followed for making an application for allotment of Director Identification Number (DIN) before appointment in a new company:
  1. Any person intending to become a director in a new Company shall make an application for the allotment of Director Identification Number (DIN) only through SPICe e-form at the time of incorporation. However, the particulars of maximum three directors shall be mentioned in (SPICe) and DIN may be allotted to maximum three proposed directors through Form INC-32(SPICe).
  2. It is clear from the legal provisions that an application for maximum three Director Identification Number (DIN) can be made at the time of incorporation.
  Note: In case of more than 3 persons who are not having DIN can’t be appointed as first director of the company at the time of incorporation. However, the company may appoint the directors up to the maximum number as specified under the provisions of the Companies Act, 2013 and rules made thereunder after its incorporation by passing a Board resolution to this effect.
• The following Procedure is to be followed for making an application for allotment of Director Identification Number (DIN) for appointment in an existing company:
  1. Convene a Meeting of the Board of Directors [As per section 173 & SS-1]:
     A Board resolution shall be passed in a duly convened board meeting approving the appointment of the proposed director in an existing company. Please refer to the Procedure for Conducting Board Meeting of the Directors for further details.
  2. Obtain Security Clearance from Ministry of Home Affairs:
     • The person who is intended to be appointed as a director in a Company, in case is a national of a country which shares land border with India, then an application is to be made to the Ministry of Home Affairs, Government of India seeking security clearance.
     • Such security clearance shall be appended to the DIN application made by person for the purposes of his/her appointment as a director in the company.
  3. Make an Application to the Central Government [Section 153 and Rule 9(1), 9(3), 9(4) & 10(1)]:
     • Every applicant intending to be appointed as a director of an existing company shall make an online application in Form DIR-3 to the Central Government for the allotment of Director Identification Number (DIN) along with the fees provided under the Companies (Registration Offices and Fees) Rules, 2014 and with the following documents:
       • One Passport Size Photo in JPG/JPEG Format
       • Board Resolution proposing his appointment as director in an existing company
       • Specimen signature duly verified
       • Valid E-mail Id and the active Mobile Number
       • ID Proof- Notarized and/ or Apostilled copy of the passport (details entered in DIR-3 match exactly with the details printed on the identity proof)
       • Residence Proof- Notarized and/ or Apostilled copy of passport, Electoral(Voter), driving license or utility bills like electricity bill, telephone bill should be in the name of the applicant which should not be older than 1 year from the filing date of the e-form.
       • Other Attachments (s) as may deem fit.
     • Form DIR-3 shall be signed and submitted electronically by the applicant through his/her own digital signature certificate.
     • Form DIR-3 shall further be verified* digitally by a Company Secretary in full-time employment of the company or Managing Director or Director or CEO or CFO of the company where the applicant is intended to be appointed as a director.
     • Father or grandfather’s surname shall be stated in the last name along with a declaration in Form No. DIR-3A, where the name of a person does not have a last name.
     • After successful payment of the filing fee of e-Form DIR-3, an approved DIN shall be generated in case the details of the e-Form have not been identified as potential duplicate.
       *Note:
       1. In case the director is illiterate, thumb impression should be certified from the concerned revenue authority (where the applicant resides) and then all the documents should be notarized or attested OR if applicant is not in a position to sign the application due to medical reasons and affixed thumb impression on the application then duly attested medical certificate from Government hospital is must with the application stating the reason of his/her ailment.
       2. Permanent Account Number (PAN) as Identity Proof is not required in case of foreign nationals.
          But in case resident or non-resident is a Director/Managing Director/Chief Executive Officer/ Principal Officer (Whole Time Director or Chief Financial officer) in Indian Company that has a financial transaction exceeding INR 2,50,000/- in a financial year, PAN is required to be obtained.
       3. Notarial Stamp and Apostille are both verification procedures for authenticating the details indicated in the document. However, there are notable differences in respect of these two verification procedures:

       Notarial Stamp	Apostille
       Primary purpose is to render a document valid for legal operations or court within the country	Primary purpose is to render a document valid for foreign travel/ settlement for education, employment or business
       Notarization is usually done by a Notary duly appointed by the central or state government	Apostille starts with notarization, and then the document goes through the Home Department and then to the Ministry of External Affairs for the final stamp
       Cost effective and less time consuming	Comparatively more cost and time involved

  4. Allotment of Director Identification Number (DIN) [Section 154 and Rule 10(2), 10(3) & 10(6)]:
     • The Central Government shall process the applications received for the allotment of Director Identification Number (DIN) under Rule 9(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014 and communicate the approval or rejection thereof to the applicant within a period of one month from the receipt of such application.
     • A period of 15 days for resubmission of application in the event of any defects or incompleteness in the application shall be extended by the Central Government.
     • Director Identification Number (DIN) so allotted in accordance with the provisions of Companies (Appointment and Qualification of Directors) Rules, 2014 is valid for the lifetime of the applicant and the same DIN cannot be allotted or transferred to any other person.
  5. Directors KYC [Rule 11(2) and 12A]:
     • Every individual holding a Director Identification Number (DIN) as on 31st March of a financial year as per the Companies (Appointment and Qualification of Directors) Rules shall submit e-form DIR-3- KYC for the said financial year to the Central Government on or before 30th, September of immediate next financial year together with fees as provided under Companies (Registration Offices and Fees) Rules, 2014.
     • In case an individual has already submitted e-form DIR-3 KYC in relation to any previous financial year, and further submits web-form DIR-3 KYC-WEB through the web service in relation to any subsequent financial year then it shall be deemed to be compliance of the provisions of rule 12A of the Companies (Appointment and Qualification of Directors) Rules for the said financial year.
     • The Director Identification Number (DIN), of an individual shall be deactivated by the Central Government or Regional Director (Northern Region), or any officer authorized by the Central Government or Regional Director (Northern Region) in case the respective director does not furnish his/her particulars in e-form DIR-3-KYC or the web service DIR-3-KYC-WEB as the case may be within stipulated time in accordance with rule 12A of the Companies (Appointment and Qualification of Directors) Rules.
  6. Key Points Pertaining to Director Identification Number (DIN):
     • The Company shall abstain from appointing or continuing the employment of any person as managing director, whole-time director or manager who is below the age of twenty-one years. [Section 196(3)(a)]
     • Only electronic payment of the filing fees of e-Form DIR-3 shall be allowed (i.e. Net banking / Credit Card/Debit Card/Pay later/ NeFT).
     • Provisional DIN shall be generated in case the details of the e-form have been found as potential duplicate and the same gets routed to DIN cell for back-office processing. Upon approval of the form, provisional DIN becomes approved DIN and would be available for further use.
     • Every individual, who has already been allotted a Director Identification Number under section 154, shall abstain from applying for, obtaining or possessing another Director Identification Number (DIN). [Section 155]
     • Every existing director shall ensure to intimate the Director Identification Number (DIN) to the company or all companies wherein he is a director as per Form DIR-3B, within one month of the receipt of the same. [Section 156 and Rule 10A(1)]
     • Every company shall ensure to intimate the Director Identification Number (DIN) of all its directors to the Registrar or any other officer or authority as may be specified by the Central Government in Form DIR-3C along with stipulated fees along with the specified fees or additional fees, within 15 days of receipt of the intimation under section 156 of the Act. [Section 157 and Rule 10A(2)]
     • Every person or company while furnishing any return, information, or particulars as per the statutory provisions, must ensure to cite the Director Identification Number (DIN) in such return, information, or particulars where such return, information, or particulars relate to the director or contain any reference of any director. [Section 158]