Surrender of DIN – Reasons and Procedure

Director Identification Number (DIN) can be surrendered due to different reasons, and the DIN can also be surrendered voluntarily for the purposes of cancellation or deactivation on certain conditions.  So what are the reasons for surrender of DIN, or when can it be surrendered.  In this article, we shall answer such queries but before that, let’s have a brief understanding of Surrender of DIN – Reasons and Procedure.

What is a Director Identification Number?

DIN is the Director Identification Number allotted to an individual by the Central Government who intends to appoints as a Director in the Company or a Partner in an LLP registered in India. The application for allotment of DIN shall be made in Form DIR-3/ Spice+ along with required fees and documents.

The same DIN allotted to the Director shall not be allotted to any other person and such DIN is valid for lifetime. It is a unique 8-digit number written underneath the signature of the concerned director in returns, applications, forms, etc. Any change in details mentioned in Form DIR-3 or Spice+ shall be intimated through Form DIR-6 to the concerned authority along with supportive documents.

Any individual shall not apply for another DIN when already possess the same otherwise it shall be considered as non-compliance of Section 155 and such director or the Company shall be liable to an imprisonment or fine.

What is the use of Director Identification Number?

Director Identification Number can be used to file returns, applications, or any kind of information pertaining to the company before the Ministry of Corporate Affairs. The director must comply with the essential requirement of the annual KYC within the due date of each financial year.

Reasons for Surrender of DIN                             

There are various reasons for surrendering a DIN by the Director such as:

• Multiple DIN– As per Section 153 of the Companies Act, 2013 if any Director holds more than one DIN, then he should make an application to Regional Director in Form DIR-5 along with notarized affidavit stating that such DIN has never been used in any kind of a document required to be submitted to ROC. Also, an application for compounding shall be filed in Form GNL-1.
• DIN obtained by fraud or wrongful manner- If a Director has obtained a DIN by furnishing false information or in a wrongful manner, then DIN is required to be surrendered by such concerned person/director or regulatory authorities shall deactivate such DIN after issuing show cause notice to the director.
• When Director declared as a person of unsound mind- As per Section 153 of the Companies Act, 2013 if the competent court has declared any person as of unsound mind, then DIN is required to be surrendered by filing Form DIR-5 along with the order of court as an attachment.
• When Director adjudicated as an insolvent- If the DIN holder adjudged as an insolvent, then he shall surrender his DIN by filing Form DIR-5 along with the order of court.
• Death of the Director- In case of death of director, his relative shall file Form DIR-5 and shall attach death certificate to it.

Ways to surrender DIN

There are two ways through which Director can surrender DIN such as on order of Central Government or Voluntarily by DIN holder.

• On order of Central Government– Central Government shall order Director to surrender his DIN in certain cases such as:
  • If Director has multiple DIN
  • If Director has obtained the DIN by fraud or misrepresentation
  • On Death of Director
  • If Director has been declared insolvent
  • If Director has been adjudged as an insolvent

• Voluntary by DIN holder– A DIN holder shall surrender his DIN on his own if the director has not been appointed in any company or body corporate while in possession of DIN and such DIN has not been used in any document which is used in communication to regulators. In such cases director can surrender his DIN voluntarily.

Process of surrendering DIN

The procedure for surrendering of DIN are as follows:

• Login to MCA website and application for surrender of DIN shall be made in Form DIR-5 along with Rs 1000/- as fees and attachments.

• For filing DIR-5 following information is required such as:
  • Name of the applicant
  • DIN to be surrendered
  • Number of DIN being surrendered
  • DIN being retained
  • Reason for such surrender
  • Self-attested copy of PAN of the applicant
  • Self-attested copy of Either Voter ID card number or Passport Number or Driving License Number of the applicant
  • Permanent Address of the applicant and his contact details
  • Digital Signature of the concerned person
  • Digital Signature of the professional who shall be Chartered accountant in practice, Cost Accountant in practice or Company Secretary in whole time practice.
  • Order of the court if such person has been declared insolvent or of unsound mind.
  • Copy of Death Certificate in the case of death of Director.

• After verification of E-form DIR-5, the Central Government may deactivate such DIN.

Wrapping up

The procedure for surrender of DIN is quite easy but the DIN holder before making an application for surrender in Form DIR-5 shall make sure that while in possession of DIN such director has not been appointed in any company or body corporate and DIN which is being surrendered has not been used in any document which is being communicated to regulatory authority. The process of surrender of DIN is quite easy, transparent and speedy with the introduction of E-form DIR-5.

However, Directors are advised to take the assistance of qualified professional and be aware of the legal requirements in order to make timely and adequate compliances.