PROVISIONS FOR SURRENDER OF DIRECTOR IDENTIFICATION NUMBER (DIN)
Any individual who wants to be a director in his own company or any other company has to take a DIN i.e. Director Identification Number by filing an application in Form DIR-3 with the Ministry of Corporate Affairs. It is a unique 8 digit number that is valid for a lifetime. Henceforth, an individual can possess only one valid DIN.
1. Can a Director have two DIN?
Section 155 of the Companies Act, 2013 specifically prohibits individuals to have more than one valid DIN. Every person aiming to be appointed as a company's director shall make an application for allotment of Director Identification Number or Designated Partner Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed only if he is not having the DIN/DPIN earlier. Nevertheless, one can opine that if an individual has applied or have the second DIN then it shall be considered as non-compliance of the Indian law.
2. What are the conditions under which an individual should apply for the surrender of DIN?
As per law, an individual having multiple DIN is liable for a punishable offense. Hence, an individual should apply for surrender of DIN on account of following conditions,
- If he has obtained Multiple DIN;
- If DIN has been obtained by any fraudulent manner or wrongful practice;
- If he has been declared of unsound mind by a competent court;
- If he is declared as an insolvent; and
- If there is no use of DIN and has not been associated as director in any company.
3. How can a person apply for the surrender of DIN?
A person having multiple DIN can apply for surrender of DIN by filing an application with Central Government or Regional Director in Form DIR-5 with a requisite amount of fees.
Form DIR-5 is an e-form available on the website of the Ministry of Corporate Affairs. Certain basic information like name, email id, mobile number of DIN holder along with reasons for surrender of DIN etc. is to be filled in such form. Documents of valid id and address proof need to be enclosed in it.
After filling the form, the same is required to be digitally attested by practicing professionals like CA, CS or CMA. After completion of all information, the same can be filed with MCA.
4. What are the consequences of if a person does not surrender multiple DIN?
If an individual or director contravenes the provisions of DIN by having multiple DIN and not surrendering the same, he shall be liable to:
- A penalty of maximum 50,000 rupees and,
- where default continues, a further penalty of 500 rupees per day.
5. In case of multiple Director Identification Number, prior obtained DIN/DPIN shall be surrender or newly obtained DIN/DPIN shall be Surrender?
For instance, First Din/DPIN obtained in 2010 and second DIN obtained in 2018, and then which DIN is to be surrendered.
According to provisions of Companies act read with pertinent guidelines and updation on the MCA site “in regards to an individual who is in possession of Duplicate/Multiple DIN/DPIN, he can retain the oldest DIN only. Director Identification Number obtained subsequently has to be surrendered.”
Be that as it may, one can opine that newly obtained Director Identification Number (implies the second DIN) shall be surrender by an individual. The surrender of earlier obtained Director Identification Number (DIN) is not at all allowed.
6. If a person having single DIN only, whether he can surrender his DIN?
As prescribed in rules of the companies Act, RD may cancel or surrender the Director Identification Number on the basis of the following mentioned situations.
As per Rule 11 (a-e) stated the condition for submission of DIN like (Lunacy, Death, Bankrupt etc).
Nevertheless, Rule 11(f) states that “on a submission made in E-Form DIR-5 by the DIN holder i.e. director for cancellation of his or her Director Identification Number along with a statement that he has never been appointed as a director in any company and the said DIN has never been used for filing of any document with any authority, the Central Government after the scrutiny may neutralize such DIN (Director Identification Number)”
As per Rule 11(f) when an individual makes application in E-form DIR-5 for the surrender of his DIN (Director Identification Number) to Regional Director has to guarantee the following conditions:
-That he has never been employed as a director in any company or LLP or any entity; and
-The said Director Identification Number has never been used for filing of any document with any authority.
-Consequently, one can propose that Single DIN (Director Identification Number) which was never used by an individual can be surrendered. But if the DIN (Director Identification Number) has been used earlier then it can’t be surrender.
7. How do I surrender a deactivated din?
So as to deliberately give up the DIN (Director Identification Number), the holder would be first required to reactivate the DIN by documenting DIR-3-KYC with an extra government expense and just from that point the surrender application can be filed.
Practical Advice to wrap up
In case the DIN holder succeeds for all the circumstances as already stated as required to voluntarily surrender the DIN and he or she does not surrender the DIN (Director Identification Number) and also do not file the DIR-3 KYC E-form within the prescribed due date, the Ministry of Corporate Affairs is bound by law to disable the DIN and a deactivated DIN cannot be filed for deliberate cancellation. In order to voluntarily surrender the DIN, the holder would be first required to activate the DIN by filing DIR-3-KYC with a supplementary government charge and only subsequently the surrender application can be filed.
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