The Ministry of Corporate Affairs has recently notified that it would be conducting Know Your Customer (KYC) verification for all the Directors of all companies by linking it to a mobile number and email address so as to verify the identity of each Director. The notification is as follows:

“As part of updating its registry or rather tightening the noose, Ministry of Corporate Affairs would be conducting Know Your Customer (KYC) of all Directors of all companies annually through a new e-form viz. DIR-3 KYC (to be notified and deployed shortly).

Accordingly, every Director who has been allotted Director Identification Number (DIN) on or before 31st March 2018 and whose DIN is in ‘Approved’ status would be mandatorily required to file form DIR-3 KYC on or before 31st August 2018.

While filing the form, the Unique Personal Mobile Number and Personal Email ID would have to be mandatorily indicated and would be duly verified by One Time Password (OTP).

The DIR-3 KYC form should be filed by every Director using his own DSC and should be duly certified by a practicing professional (CA/CS/CMA). Filing of DIR-3 KYC would be mandatory for Disqualified Directors also.

Effect of Non – Compliance: After expiry of the due date by which the KYC form is to be filed, the MCA21 system will mark all approved DINs (allotted on or before 31st March 2018) against which DIR-3 KYC form has not been filed as ‘DEACTIVATED’ with reason as ‘Non-filing of DIR-3 KYC’.

After the due date, the filing of DIR-3 KYC in respect of such deactivated DINs shall be allowed only upon the payment of a specified fee only, without prejudice to any other action that may be taken.

New digital signatures shall be obtained if existing digital signature has already expired.

In case of obtaining fresh digital signatures: For the resident directors, self-attestation of the identity and address proof is sufficient. However for the Non-resident foreign directors, the attestation requirements (Both Apostille and Notary on the digital signature application, identity & address proofs) shall be complied with. ”

This is a welcome step from the Ministry of Corporate Affairs towards its efforts to systematically weed out fake companies and Directors.