What is a Director Identification Number (DIN)? – Explained

The Director Identification Number, commonly known as DIN, is a crucial aspect of corporate governance in India. It is assigned by the Central Government of India and remains valid for life. This permanent identifier is a key tool in maintaining transparency and accountability in the corporate world. 

What is Director Identification Number?

A Director Identification Number (DIN) is essentially a digital fingerprint for company directors in India. This eight-digit code is issued by the Ministry of Corporate Affairs (MCA). It serves as a unique identifier for individuals in directorial roles. 

It is not just a random number, but a powerful tool that allows tracking of a person’s directorships across various companies. By providing this unique identifier, the DIN system enhances transparency in corporate governance and simplifies the process of regulatory filings with the Registrar of Companies. 

Who Needs a DIN?

In India, anyone who holds or intends to hold a position as a director in a company must have a DIN. This requirement, mandated by the Companies Act of 2013, applies to all types of companies, whether public, private, or non-profit. The process of obtaining a DIN involves an online application through the Ministry of Corporate Affairs portal. 

Applicants need to provide proof of identity and address. After these are verified, the DIN is issued. It is a lifelong credential that becomes an essential part of a director’s professional identity. It enables them to fulfill their legal and regulatory obligations effectively. 

Importance of a Director Identification Number (DIN)

The DIN plays a vital role in India’s corporate landscape. Here’s why it is so important:

• Unique Identification: The DIN ensures each director has a distinct identifier, reducing the risk of confusion and fraud.

• Transparency and Accountability: It provides easy access to director information, fostering trust in company registration and business practices.

• Regulatory Compliance: It’s mandatory for all directors and was introduced through the Sections 226A to 226G of the Companies (Amendment) Act of 2006. It ensures they follow the incorporation process and legal requirements. 

• Investor Confidence: The system boosts transparency, helping attract investment by making it easier to verify directions. 

• Ease of Business Operations: It simplifies director management during company registration, reducing administrative work.

• National Applicability: The DIN is valid nationwide, ensuring consistent identification across the country, facilitating GST registration.

Documents Required for Obtaining a Director Identification Number

For SPICe Form

When applying for a DIN through the Simplified Proforma for Incorporating Company Electronically (SPICe) form for new companies, you need to attach:

• Proof of identity
• Address proof
• NOC or rental agreement

These documents need to be for each proposed director. The Ministry of Corporate Affairs (MCA) will only allocate DINs to applicants after thoroughly reviewing and approving the form. 

For DIR-3

Attachments:

• A recent photograph
• A valid identity proof document
• Proof of residence
• A signed verification document including personal details and a declaration
• For non-Indian nationals, a passport copy serves as identity proof.

Documents to be Attested by a CA, CS, or CMA:

A photograph, identity proof, and residence proof must be attested by a professional in whole-time practice. This can be:

• A chartered accountant (CA)
• A company secretary (CS)
• A cost and management accountant (CMA)

These professionals verify the authenticity of the documents and attest to their validity. For foreign nationals, their documents can be attested by the Consulate of the Indian Embassy in their country or a Foreign Public Notary. This extra layer of verification helps maintain the integrity of the DIN application process. 

Form DIR-6

This form is used for modifying any details previously submitted in the DIR-3 form or SPICe form regarding Directors. When submitting Form DIR-6 online, you must include attested supporting documents that verify the changes you are requesting. This could be:

• Updated proof of address
• Identity documents
• Or other relevant certificates depending on the nature of the change.

Usage of DIN

A DIN is used in several important ways:

• Company Formation: Required during the incorporation process to ensure proper registration.

• Official Identification: Used for signing contracts and representing the company, enhancing business credibility. 

• Financial Transactions: Needed for key financial actions like opening bank accounts or signing major agreements. 

• Regulatory Tracking: Helps authorities monitor directors and prevent involvement in illegal activities.

Eligibility Criteria for DIN

Before applying you need to ensure that you are eligible for the DIN:

• You must be at least 18 years old.
• There are no specific educational qualifications required. 
• You should be sound of mind.
• You should not have been declared as a person of unsound mind by a competent court. If a court has declared you mentally unfit, you are ineligible to apply for a DIN. 
• You should not be an undischarged insolvent. This means you should not be in the middle of a legal bankruptcy process where you still owe unpaid debts.
• You should not have applied for adjudication as an insolvent. That is, you must not have started any legal proceedings to declare yourself unable to pay your debts. 

How to Apply for a Director Identification Number?

To apply for a DIN, complete the incorporation forms through the SPICe+ forms when setting up a new company. For existing companies, a separate application is needed, ensuring compliance for directorship. 

Application for DIN Through SPICe+

If you are applying to be a first-time director in a new company, the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form is used to obtain a DIN. Here is a step-by-step process:

Step 1: Start by acquiring Digital Signature Certificates (DSCs) for all proposed directors. DSCs are mandatory for the authentication of documents submitted electronically. 

Step 2: Access the MCA portal by logging in with your registered credentials. 

Step 3: Go to the applicational history on your user dashboard and open the SPICe+ form. 

Step 4: Complete the SPICe+ Part A form, which involves providing company-related information. 

Step 5: Click on the “Proceed for incorporation” button to continue. 

Step 6: Access the SRN dashboard to locate your SPICe+ application with the status “Draft.” 

Step 7: Complete Form No. SPICe+ Part B along with the linked forms. Provide all necessary details about the proposed directors. 

Step 8: Ensure all forms are affixed with DSCs and upload them to the MCA portal. 

Step 9: Submit the requisite fees for processing using methods like net banking, credit card, ir NEFT. 

Step 10: Once the form is processed successfully, you will receive an intimation mail, along with the Certificate of Incorporation, PAN, TAN, etc. The MCA processes the application, which may take up to a month for new DIN allocations. 

Step 11: If no duplicate information is detected, a DIN will be automatically generated. If there are potential duplicates, a Provincial DIN valid for 60 days will be issued. 

Application for DIN Through Form DIR-3

If you are aiming to be appointed as a director in an existing company, you need to apply using the eForm DIR-3. Follow these steps to complete the application process:

Step 1: Go to the official MCA website and either register as a new user or log in with your existing credentials. 

Step 2: Click on the “e-Forms” tab and select “e-Form upload” to locate the DIR-3 form. 

Step 3: Complete the DIR-3 form with accurate and up-to-date personal details, such as your name, father’s name, address, date of birth, and nationality. 

Step 4: Scan and upload all required documents, including identity proof, address proof, and a photograph ensuring they are properly attested. 

Step 5: The DIR-3 form must be signed digitally by you and further verified by a full-time Company Secretary or an authorized officer (like a Managing Director, CEO, or CFO) of the company where you intend to become a director. 

Step 6: Submit the prescribed fee for processing the DIN application. 

Step 7: After verification, a DIN will be allotted. If there is a possibility of duplication, a Provisional DIN will be generated. 

Step 8: After receiving your DIN, notify all companies where you hold directorship within one month. Subsequently, these companies must inform the Registrar of Companies (RoC) within 15 days. Failure to comply can result in penalties.

By following these steps, you can ensure compliance with Indian corporate laws and facilitate a smooth application process for obtaining a Director Identification Number. 

DIN Application Procedure of Other Forms

DIR-6 Form: Intimation of Change in Particulars of Director

This form is used to change a director’s personal information such as name, address, or contact details submitted in DIR-3.

Process:

Step 1: Fill out the eForm DIR-6 on the MCA portal.

Step 2: Attach supporting documents that verify the changes. 

Step 3: Ensure all documents are properly attested. 

Step 4: Pay the requisite fee online.

Step 5: Submit the form electronically.

After these steps, the MCA updates the director’s information in their database upon approval. 

DIR-3C Form: Intimation of Director Identification Number by the Company to the Registrar)

This form is used by companies to inform the Registrar about a director’s DIN.

Process: The company fills this form within 15 days of receiving DIN information from a director. 

DIR-5 Form: Application for Surrender Director Identification Number

This form is used for the surrender of DIN. This DIN form should be used only in cases where the DIN holder has never been appointed as a director and the DIN has never been used.

Process: Submit the form with a declaration about the non-usage of the DIN. 

This comprehensive system of forms ensures that the DIN process is thorough. It allows for proper allocation, modification, and when necessary, surrender or cancellation of DINs. It maintains the integrity of the corporate governance system in India.

Common Causes of Rejection of a DIN

When applying for a DIN, there are a few common mistakes that can lead to rejection:

• Missing Documents: Make sure you have included all the required supporting documents. Leaving anything out is a quick way to get your application rejected. 

• Invalid Documents: Double-check that all your documents are valid and up-to-date. Expired or incorrect documents would not be accepted.

• Lack of Attestation: Your documents need to be properly attested. This means they need to be verified by an authorized person. Forgetting this step can lead to rejection. 

• No Digital Signature Certificate: For DIR-3 applications, you need a valid Digital Signature Certificate. Without it, your application would not be processed. 

What to Do if You Receive a Rejection for DIN?

If your DIN application gets rejected, do not panic. Here is what you need to do:

Step 1: Check the rejection reason and correct any errors within 15 days.

Step 2: Resubmit the DIN application using the company forms and pay the fee again if necessary. 

Step 3: Consult a professional if issues persist to ensure compliance and increase approval chances. 

Keep copies of all communications, including rejection emails and your responses. These may help demonstrate compliance efforts. If rejected multiple times, consider hiring a professional. MCA allows corrections and resubmissions. Address issues carefully, resubmit on time, and ensure accuracy to resolve most rejections successfully. 

Reasons for Surrendering or Canceling the DIN

The Director Identification Number (DIN) is generally a lifelong identification for company directors in India. However, there are specific circumstances under which a DIN may be surrendered or canceled. Understanding these reasons is crucial for maintaining corporate governance integrity. Here is a detailed look at the various scenarios:

• Multiple DINs: If an individual has more than one, theft must surrender the extras.

• Non-Usage: If the DIN isn’t used for filing for an extended period, it may be cancelled. 

• Misrepresentation or Fraud: Fraudulent DIN issuance leads to cancellation and legal consequences. 

• Death of the DIN Holder: The DIN is cancelled after a holder’s death, ensuring records remain accurate. 

• Judicial Orders: A court may order DIN cancellation in specific legal circumstances. 

• Voluntary Surrender: Individuals may surrender their DIN voluntarily if they’ve never been appointed a director in a company. Submit DIR-5 form along with declaration of non-usage. 

• Erroneous Allotments: In cases when a DIN is allocated by mistake or due to a technical glitch, it may be canceled once the error is identified. 

It is important to note that the process of DIN cancellation or surrender is not taken lightly by the MCA. There are usually checks and balances in place, including opportunities for the DIN holder to present their case or rectify issues before final cancellation.

For directors, it is crucial to:

• Regularly monitor their DIN status
• Comply with all MCA regulations and KYC requirements
• Promptly report any issues or discrepancies related to their DIN
• Seel legal or professional advice if faced with potential DIN cancellation

By understanding these reasons and maintaining compliance, directors can ensure the continued validity of their DINs. This is essential for their role in corporate governance in India. 

Validity of the Director Identification Number

In India, the DIN remains valid for a lifetime as long as the director complies with legal norms. However, it can be revoked if regulatory requirements aren’t met, ensuring business e governance and transparency.

However, it is crucial to understand that while a DIN does not expire, it can be revoked or deactivated under certain circumstances. The Ministry of Corporate Affairs (MCA) has the authority to take action against a DIN if the holder fails to adhere to regulatory norms or engages in activities that comprise their eligibility to serve as a director. 

Some scenarios that could lead to DIN revocation or deactivation include:

• Non-Compliance with MCA Regulations: If a director fails to file mandatory returns or disclose required information, the MCA may choose to deactivate their DIN. 

• Disqualification as a Director: If an individual is disqualified from acting under the Companies Act, 2013, their DIN may be canceled. Disqualification can occur due to reasons like bankruptcy, fraud, or repeated non-compliance with corporate laws. 

• Company Law Violations: Serious violations of company law by a director can lead to a DIN cancellation as part of punitive measures. Involvement in corporate fraud or serious misconduct can be such reasons. 

• Multiple DIN Holdings: If it is discovered that an individual has obtained multiple DINs which is against regulations, the extra DINs will be deactivated and penalties may be imposed. 

• Non-Compliance with KYC Requirements: Failure to comply with the annual KYC (Know Your Customer) requirements can lead to DIN deactivation. While this is initially a deactivation, prolonged non-compliance can result in cancellation. 

• Court Orders: In some cases, a court may order the cancellation of a DIN as a part of a legal judgment. 

DIN holders need to understand that maintaining the validity of their DIN is an ongoing responsibility. This involves not just ethical conduct in their role as directors, but also ensuring timely compliance with all MCA requirements. 

Fees for the Director Identification Number in India

The fee structure for obtaining a Director Identification Number in India is designed to be accessible and straightforward. It reflects the government’s efforts to promote ease of doing business. However, the exact amount you will need to pay depends on the method through which you are applying for your DIN.

For Those Incorporating a New Company:

When incorporating a new company, the DIN fee is included in the overall company registration cost, simplifying the process. Additional services like GST registration may incur extra fees depending on the company type.

For Those Joining Existing Companies:

If applying for a DIN to join an existing company, use the DIR-3 form with a Rs. 500 fee, payable online.

• Payment Methods: Pay via the MCA portal using banking, credit/debit cards or NEFT/RTGS. 
• Currency: Always payable in INR, regardless of nationality. 
• No Cash or Offline Payments: MCA does not accept cash or offline transactions. 
• Non-Refundable Nature: The fee is non-refundable, even if the application is rejected. 
• Potential Additional Costs: Notarisation, attestation or hiring a CA may incur extra charges. 
• Fee Revisions: Check the latest fee on the official website before applying.

This affordable DIN Director Identification Number fee encourages corporate governance and formal company incorporation in India.

Informing Companies About Your DIN 

Once you get your DIN, you need to let companies know. Here is how:

• Update Company Records: Inform a registered company where you are a director. 

• Provide the DIN Allotment Document: Share your DIN allotment letter with the compliance team. 

• Ensure Official Filings are Updated: The company must include your DIN in the Registrar of Companies (RoC) filings. 

• Complete Necessary Forms or Declarations: Sign any required documents to formalise your role. 

• Keep the Company Informed of Changes: Notify companies of any DIN-related changes to ensure compliance. 

Maintaining and Deactivating a DIN

To keep your DIN activated, stay compliant with MCA regulations:

• Regularly update filings and personal details. 
• Non-compliance may lead to penalties or deactivation. 
• If deactivated, overdue filings and fines must be submitted for reactivation. 

An active DIN ensures transparency and smooth business operations, crucial for securing a business loan application, company loan application or corporate loan in the future.

Conclusion

A DIN is essential for any company director in India, ensuring compliance, transparency and smooth company registration. Directors can also use the DIN to apply for a business loan of MSME loan apply online to support growth. For financial needs, consider tools like a business loan calculator to evaluate business loan interest rates and find suitable options from Lendingkart.