This article is written by Mr.Archak Das, BBALLB student studying in Adamas university, Kolkata. The author is a 2nd year law student
INTRODUCTION
The Ministry of Corporate Affairs (MCA) issues Director identifying Numbers (DINs)—unique identification numbers—to anyone who want to serve as directors of Indian corporations. DIN is mandatory for all current and aspiring directors in a company.
The DIN system was introduced in India to maintain a database of all directors, which can be used to track their activities, disqualify them if necessary, and prevent fraudulent activities. The DIN system helps in promoting transparency, accountability, and good corporate governance.
To obtain a DIN, an individual must file an online application with the MCA and provide relevant information such as their name, date of birth, address, and identity proof. The application is verified by the MCA, and upon approval, the individual is issued a unique DIN, which is valid for a lifetime.
It is important to note that an individual can have only one DIN, and it is transferable across companies. In case a director ceases to be a director of a company, their DIN will remain valid and can be used for future directorship positions.
In conclusion, the Director Identification Number (DIN) is a unique identification number assigned to individuals who wish to become directors of a company in India. It is a mandatory requirement and helps in promoting transparency, accountability, and good corporate governance.
Why is director identification number important?
The Director Identification Number (DIN) is an important identification number assigned to individuals who wish to become directors of a company in India. The following are some reasons why DIN is important:
- Legal compliance: DIN is a mandatory requirement for all current and aspiring directors of a company. Failure to obtain or maintain a valid DIN can result in legal consequences.
- Prevents fraudulent activities: The DIN system helps in preventing fraudulent activities by maintaining a database of all directors, which can be used to track their activities and disqualify them if necessary.
- Promotes transparency: The DIN system promotes transparency by maintaining a record of all directors, which can be accessed by shareholders, regulators, and other stakeholders.
- Improves corporate governance: DIN is a tool for improving corporate governance by ensuring that only individuals with a valid DIN are appointed as directors of a company.
- Enhances accountability: DIN enhances accountability by ensuring that each director is uniquely identified, and their actions can be traced back to them.
So, the Director Identification Number (DIN) is a vital identification number that is provided to persons who desire to become directors of a company in India. It is necessary for legal compliance, the prevention of fraudulent activities, the promotion of transparency, the improvement of corporate governance, and the enhancement of accountability.
How to apply for the allotment of Director Identification number?
Here’s how you can apply for the allotment of DIN:
- Visit the MCA website (www.mca.gov.in) and click on the “MCA Services” tab.
- Under the “MCA Services” tab, select “DIN services” from the drop-down menu and click on “Apply for DIN.”
- Fill in the necessary details such as your name, date of birth, father’s name, and email id. You will also need to upload a scanned copy of your identity proof and address proof such as Aadhaar card, PAN card, passport, or driver’s license.
- Once you have submitted the application form, you will receive an automatic acknowledgement with a provisional DIN. This provisional DIN will be valid for 60 days.
- The MCA will then verify the information provided by you and, if found satisfactory, will allot you a permanent DIN. This process can take up to a few days.
- Once you receive the permanent DIN, you can use it for any future company directorship.
It is important to note that individuals who have already been allotted a DIN need not apply for a new one. A single DIN is valid for a lifetime and can be used for multiple directorships.
Director identification number under the companies act
In India, the Director Identification Number (DIN) is a unique identification number assigned by the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013, to individuals who wish to become directors of a company. Every individual, including foreign nationals, who intends to be appointed as a director in a company, is required to obtain a DIN. The DIN serves as a single identification number for a director, and all his/her details are maintained in a central database. To obtain a DIN, an individual must submit an online application on the MCA website along with the required documents, such as a passport-size photograph, proof of identity, and proof of address. Once the application is approved, the individual is assigned a unique DIN. It is mandatory for every director of a company to have a DIN, and any individual who acts as a director without a DIN may face penalties under the Companies Act. No person may get more than one Director Identification Number (DIN) under Section 155 of the Companies Act of 2013. A DIN is a one-of-a-kind identifying number assigned to individuals appointed as directors of a corporation. It is a permanent identification number and is valid for a lifetime. However, a person cannot obtain more than one DIN, as this could lead to confusion and make it difficult to maintain accurate records of directors. If a person has more than one DIN, they are required to surrender the additional DINs and retain only one. If a person uses multiple DINs to hide their past fraudulent activities, they may face severe penalties and legal consequences. Thus, the prohibition on obtaining more than one DIN ensures that each director has a unique identification number, which helps maintain transparency and prevent fraudulent activities in the corporate sector.
As per Section156 of the Companies Act, 2013, every person who is appointed as a director in a company is required to intimate his/her Director Identification Number (DIN) to the company within a period of thirty days from the date of appointment or allotment of DIN, whichever is earlier. This means that a newly appointed director must obtain a DIN within a specified period and then intimate the same to the company within thirty days of appointment. The company is required to maintain a register of directors containing their DINs, along with other details such as their name, address, and date of appointment.
Intimating the DIN to the company is important because it helps in maintaining accurate records of directors and preventing fraudulent activities. It also helps in ensuring compliance with the provisions of the Companies Act, as having a unique identification number for each director makes it easier to track their activities and ensure proper operations.
If a director fails to intimate his/her DIN to the company within the specified period, the company may be liable to pay a penalty, and the director may also face legal consequences. Therefore, it is essential for every director to comply with the requirement of intimating their DIN to the company within the prescribed time limit.
CONCLUSION
Thus, The Ministry of Corporate Affairs (MCA) issues Director identifying Numbers (DINs)—unique identification numbers—to anyone who want to serve as directors of Indian corporations.. The DIN helps to identify directors, ensures regulatory compliance, maintains integrity, promotes transparency, and establishes accountability. These factors collectively contribute to good corporate governance and protect the interests of stakeholders and the provisions governing it are laid down in the Companies Act.
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