How to Obtain Director Identification Number?

Aspiring entrepreneurs who want to register a company in India must obtain a Director Identification Number (DIN) before they can start the registration process. A DIN is a unique identification number allotted by the Ministry of Corporate Affairs (MCA) to individuals who want to become directors or already serve as directors of a company. In this article, we will discuss the steps to obtain a DIN.

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A Director Identification Number (DIN) is a unique identification number assigned to an individual who is appointed as a director of a company in India. The DIN is a mandatory requirement for any individual who wishes to become a director of a company, according to the Companies Act, 2013.
The DIN is a crucial element for maintaining a comprehensive database of all directors of companies registered in India. It helps identify and track the activities of directors, and assists in preventing fraudulent practices such as money laundering, corruption, and other financial crimes. Let us now discuss briefly about meaning of Director Identification Number and process of obtaining DIN, along with its importance and benefits.

Meaning of Director Identification Number (DIN)

A Director Identification Number (DIN) is a unique identification number that is allotted by the Ministry of Corporate Affairs (MCA) to individuals who are appointed as directors of a company. The purpose of a DIN is to identify the directors of a company and to maintain a database of their personal information.

The DIN system was introduced in 2006, as a part of the Companies Act, 1956, and has since then been mandatory for all directors of companies registered under the act. The DIN is a permanent number and does not change even if a director resigns or is removed from the board.

DIN is a unique 8-digit number which remains valid for the lifetime of the director. It is a mandatory requirement for every individual who wants to be appointed as a director of a company to obtain a DIN.

Why is a Director Identification Number (DIN) necessary?

The Director Identification Number (DIN) is necessary for the following reasons:

• To maintain a Database of Directors: The DIN system enables the government to maintain a database of all directors who are serving on the boards of various companies. This helps in ensuring transparency and accountability in the corporate sector.
• To Prevent Fraud: The DIN system helps in preventing fraud by ensuring that only genuine and eligible individuals are appointed as directors of a company.
• To simplify the Process of Appointment: The DIN system simplifies the process of appointment of directors by eliminating the need for repeated verification of the director’s personal details.

Importance of Director Identification Number

DIN is a unique identification number which helps in identifying the directors of a company. It helps in preventing fraud and malpractices by ensuring that no individual can act as a director of a company without obtaining a DIN. DIN also helps in maintaining a database of all the directors of companies which can be accessed by various government agencies for the purpose of investigations and enforcement.

Importance of DIN is as follows:

• Ensuring the identity of Directors: The primary role of a DIN is to ensure that the director’s identity is established before they assume any directorship in a company. This helps to prevent fraudulent activities and also ensures that the company is being managed by a legitimate director. The DIN system ensures that all directors are properly identified and their background is verified, which helps to maintain the integrity of the corporate governance system.

• Promoting Transparency and Accountability: The use of DINs promotes transparency and accountability in the corporate governance system. The DIN system allows stakeholders, including shareholders and regulators, to track the activities of individual directors, which helps to ensure that they are acting in the best interest of the company. This promotes transparency in the decision-making process and ensures that directors are held accountable for their actions.

• Preventing Fraudulent Activities: DINs play an important role in preventing fraudulent activities in companies. The DIN system ensures that the identity of the director is established before they assume any directorship in a company. This helps to prevent fraudulent activities and ensures that the company is being managed by a legitimate director. The use of DINs also helps to track the activities of directors, which helps to prevent fraudulent activities such as money laundering and insider trading.

• Streamlining the Registration Process: The use of DINs streamlines the registration process for directors. The DIN system eliminates the need for directors to provide multiple identity documents to establish their identity. The use of DINs also ensures that the registration process is completed quickly and efficiently, which helps to promote the ease of doing business in India.

Benefits of obtaining Director Identification Number

The following are the benefits of obtaining Director Identification Number:

• Facilitates Easy Appointment Process: DIN has simplified the appointment of directors of companies in India. Before the introduction of DIN, companies had to submit detailed information about their directors every time they appointed a new director. However, with the introduction of DIN, companies can simply verify the DIN of the individual and appoint them as a director. This has significantly reduced the time and effort required for the appointment process.

• Prevents Duplication of Directorships: DIN also helps in preventing the duplication of directorships. Since DIN is a unique identification number, it ensures that no individual can have multiple DINs. This helps in ensuring that the same individual does not hold directorship positions in multiple companies, thereby reducing the possibility of conflicts of interest.

• Improves Corporate Governance: DIN plays a vital role in improving corporate governance. It helps in identifying and tracking the conduct of directors of companies. This ensures that only individuals with good conduct and reputation are appointed as directors, which in turn, improves the governance of the company.

• Facilitates Easier Communication with Regulators: DIN also facilitates easier communication with regulators. Since DIN is a unique identification number, it helps in identifying directors of companies more easily. This makes it easier for regulators to communicate with directors regarding compliance with various laws and regulations.

• Protects the Interests of Shareholders: DIN protects the interests of shareholders by ensuring that only qualified and trustworthy individuals are appointed as directors of companies. This helps in ensuring that the decisions taken by the board of directors are in the best interests of the company and its shareholders.

Eligibility criteria of obtaining Director Identification Number

Following is the eligibility criteria for obtaining a Director Identification Number (DIN):

• Indian Citizen or NRI: Only Indian citizens or Non-Resident Indians (NRIs) are eligible to apply for a DIN.
• Age Limit: The applicant should be at least 18 years old to apply for a DIN.
• No prior conviction: The applicant should not have been convicted of any offence involving moral turpitude or economic offences or any offence punishable with imprisonment for more than six months.
• No Insolvency: The applicant should not be an undischarged insolvent.
• No Disqualification: The applicant should not be disqualified to act as a director under any provisions of the Companies Act, 2013.
• Required Documents: The applicant should have a valid PAN card and address proof such as Aadhaar Card, Passport, Driving License, Voter ID card, or any other government-issued identity card.

Documents required for obtaining Director Identification Number

In order to obtain a DIN, one need to submit a set of documents to the Ministry of Corporate Affairs (MCA), which are as follows:

Proof of identity: The first and foremost document required for obtaining a DIN is a proof of identity. This can be any one of the following:

• Aadhaar card
• PAN card
• Passport
• Driving license
• Voter ID card

It is important to note that the proof of identity should be in the name of the applicant, and should be valid at the time of submission.

Proof of Address: The next document required is a proof of address. This can be any one of the following:

• Aadhaar card
• Passport
• Driving license
• Voter ID card
• Bank statement
• Electricity bill
• Telephone bill

The proof of address should also be in the name of the applicant, and should not be more than two months old at the time of submission.

Proof of Date of Birth: The third document required is a proof of date of birth. This can be any one of the following:

• Birth certificate
• School leaving certificate
• Passport
• PAN card
• Driving license

The proof of date of birth should also be in the name of the applicant, and should be issued by a competent authority.

Photograph: The fourth document required is a passport-size photograph of the applicant. The photograph should be in color, and should have a white background. The applicant should sign across the photograph, and the photograph should not be more than six months old at the time of submission.

Digital Signature Certificate: The final document required is a Digital Signature Certificate (DSC). A DSC is a secure electronic key that is used to sign electronic documents. It is issued by a licensed certifying authority, and is valid for a specific period of time. The applicant should obtain a DSC from a licensed certifying authority, and should submit it along with the other documents.

How to Obtain Director Identification Number?

To obtain a Director Identification Number (DIN), an individual needs to follow these steps:

• Step 1: Obtain Digital Signature Certificate (DSC): The first step to obtaining a DIN is to obtain a Digital Signature Certificate (DSC) from a Certifying Authority (CA). A DSC is required for online verification of identity, and it ensures that the information submitted is secure and cannot be tampered with.

• Step 2: Obtain Director Identification Number (DIN) Application Form: The next step is to obtain the DIN application form. You can download the DIN application form from the MCA website or get a physical copy from any MCA office.

• Step 3: Fill the DIN Application Form: After obtaining the DIN application form, fill in all the required details such as name, address, date of birth, etc. Ensure that all the information provided is accurate and matches the information in your supporting documents.

• Step 4: Attach Supporting Documents: Attach the required supporting documents such as a passport-sized photograph, identity proof, address proof, and educational qualifications. The documents must be attested by a notary public or a gazetted officer.

• Step 5: Pay the DIN Application Fee: Pay the DIN application fee online through the MCA portal or offline at an MCA office. The fee for obtaining a DIN is Rs. 500 for Indian citizens and Rs. 5,000 for foreign nationals.

• Step 6: Submit the DIN Application Form: After filling in the application form and attaching the supporting documents, submit the form online or offline at the nearest MCA office.

• Step 7: Track the Status of DIN Application: You can track the status of your DIN application online through the MCA portal. It takes approximately 2-3 days to process the DIN application. Once the application is processed, the DIN will be allotted and sent to the email address provided in the application form.

Important points of consideration to be kept in mind while obtaining Director Identification Number

The DIN is issued by the Ministry of Corporate Affairs (MCA) and is mandatory for all individuals who wish to become directors of companies registered under the Companies Act, 2013. Obtaining a DIN is an essential step for individuals who want to hold a directorship position in any company. However, there are certain points that must be kept in mind while obtaining a DIN to ensure a smooth process, which are:

• Understanding the Requirements: The first point to consider while obtaining a DIN is to understand the requirements. The MCA has laid down certain eligibility criteria that must be fulfilled before applying for a DIN. An individual must be over the age of 18 years, must not have been declared as a proclaimed offender or a bankrupt, and must not have been convicted of any offence in the past. Additionally, the individual must have a valid Permanent Account Number (PAN) card and a valid mobile number and email ID.

• Filing the Application: Once an individual meets the eligibility criteria, they can proceed with filing an application for a DIN. The application can be filed online through the MCA portal. The applicant must fill in all the required details correctly and upload the necessary documents. The application must be accompanied by a photograph of the applicant and the prescribed fee. It is important to ensure that all the information provided in the application is accurate and matches the information on the PAN card.

• Verification of Application: After the application is filed, it undergoes a verification process. The MCA verifies the details provided by the applicant and checks if the applicant meets the eligibility criteria. It is important to note that the verification process can take some time, and the applicant must be patient.

• Validity of DIN: The DIN is valid for the lifetime of the individual, and there is no need to renew or update it. However, if the details provided by the applicant change, such as the address or mobile number, the applicant must update the details in the MCA portal.

• Consequences of providing False Information: It is important to note that providing false information or withholding any information while obtaining a DIN can lead to severe consequences. The MCA can reject the application or cancel the DIN, and the individual may face legal action.

Conclusion

In conclusion, the Director Identification Number (DIN) is a unique identifier that is essential for any individual who wishes to become a director of a company in India. It helps in maintaining a comprehensive database of directors, which enables the government to monitor and regulate the corporate governance structure of the companies. Obtaining a DIN is a straightforward process, and individuals who wish to become directors should ensure that they obtain one before they assume the role.
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