Less than 12 lakhs, out of 33 lakh active directors, have completed the criterion of Know Your Customer (KYC) under the new system of government. According to the new provisions, the directors had to complete the KYC procedures in order to maintain the board position in the companies. The Ministry of Corporate Affairs (MCA) had fixed deadline till midnight on Saturday. It is being said that the ministry will no longer carry this deadline forward. The Institute of Chartered Accountants of India (ICAI) also issued announcement on its website on 15th September that “there has been no extension of due date of filing DIR 3 KYC. As of now the due date is 15th September, 2018 which is today.”
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Due to not following the new guideline, the Director Identification Number (DIN) of these directors will be freezed. This decision was taken to stop the practices of manipulating the directors in the companies, appointing the servants or employees as directors without their knowledge.
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About 50 lakh DIN has been issued in the country. Only 33 lakh of them were considered active directors. However, there are also a large number of ghost directors. This KYC format is a part of the major process of shutting down shell companies across the country. Through it, it is trying to identify who actually owns the ownership of companies.
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Shell companies are constantly being increased vigorously. Due to no filing of returns, registration of nearly 3 lakh companies has been cancelled. In addition, more than 3 lakh directors have also been disqualified. Government believes that these shell companies and their bogus directors are the main source of black money.
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Under this exercise most of the directors whose PAN were required to link with DIN, they should now also link the Aadhaar with DIN. The government has also made it mandatory. Although they are currently giving relaxation to those who do not have the Aadhaar, but the number of such people is very low. DIN holders have to sign and submit a form certified by chartered accountant or company secretary.
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In case a director, who was supposed to file the e-Form DIR-3 KYC, did not file, the department will mark the DIN of such director as ‘Deactivated’ with the reason shown as ‘Non-filing of DIR-3 KYC’. If the director wishes to re-activate his DIN in future by filing the missed out e-Form DIR-3 KYC, he can do so after paying a late fee of ₹ 5,000.
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