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Cancellation or Surrender of Director Identification Number

Cancellation or Surrender of Director Identification Number

Background 

Director Identification Number (DIN) means an identification number allotted by the Central Government to any individual, intending to be appointed as director or to any existing director of a company, for the purpose of his identification as a director of a company. Provided that the Director Identification Number (DIN) obtained by the individuals prior to the notification of these rules shall be the DIN for the purpose of the Companies Act, 2013. Provided further that “Director Identification Number” (DIN) includes the Designated Partnership Identification Number (DPIN) issued under section 7 of the Limited Liability Partnership Act, 2008 and rules made thereunder. [Rule 2 of the Companies (Appointment & Qualification of Directors) Rules, 2014.] 

Compliance Requirements

  • Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed. Provided that the Central Government may prescribe any identification, number which shall be treated as Director Identification Number for the purposes of this Act and in case any individual holds or acquires such identification number, the requirement of this section shall not apply or apply in such manner as may be prescribed [Section 153 of the Companies Act, 2013]
  • Prohibition to obtain more than one DIN: No individual, who has already been allotted a Director Identification Number under section 154, shall apply for, obtain or possess another Director Identification Number. [Section 155 of Companies Act 2013]

As Rule 11 of the Companies (Appointment & Qualification of Directors) Rules, 2014 

  • DIN can be cancelled in the following conditions: 
    • If the DIN is found to be duplicated in respect of the same person provided the data related to both the DIN shall be merged with the validly retained number; 
    • If the DIN was obtained in a wrongful manner or by fraudulent means; 
    • In case of the death of the concerned individual; 
    • If the concerned individual has been declared as a person of unsound mind by a competent Court; 
    • If the concerned individual has been adjudicated an insolvent. 
    • Concerned individual is/was not associated with any company/LLP and the DIN has been never used for filing of any document with any authority. 
  • The Central Government or Regional Director before cancellation or deactivation of DIN shall give an opportunity of being heard to the concerned individual 
  • The Central Government or Regional Director (Northern Region), or any officer authorized by the Central Government or Regional Director (Northern Region) shall, deactivate the Director Identification Number (DIN), of an individual who does not intimate his particulars in e-form DIR-3-KYC 3 or the web scrvice DIR-3-KYC-WEB as the case may be within stipulated time in accordance with rule 12A 

DIN can be surrendered in two ways: 

  1. Voluntary by the DIN holder 
    • On an application made to the Central Government in Form DIR-5 by the DIN holder to surrender his or her DIN. 
    • The application shall be filed along with the declaration that he has never been appointed as director in any company and the said DIN has never been used for filing of any document with any authority. 
    • Documents to be filed in Form DIR-5 

Proof of Identity of Applicant which can be any of the following:

    • PAN Card
    • Aadhaar Card
    • Voter Identity Card
    • Passport
    • Driving License

Proof of residence of applicant which can be any of the following document:

    • Aadhaar Card
    • Passport
    • Voter Id Card
    • Ration Card
    • Driving License
    • Electricity Bill (not older than 2 months for Indian National and 1 year for foreign national)
    • Telephone Bill (not older than 2 months for Indian National and 1 year for foreign national)
    • Affidavit including declaration that retained DIN will be updated with all the associated CIN/LLPIN 
    • Copy of court order declaring DIN holder as insolvent/unsound mind where applicable
    • Copy of death certificate in case of death
    • Option attachment as required

Application to be digitally signed by the concerned individual and certified by any of the following: 

    • Chartered Accountant (in whole-time practice) or 
    • Cost Accountant (in whole-time practice) or 
    • Company secretary (in whole-time practice) 
    • The Central Government on verification of documents and if satisfied may cancel/ deactivate such DIN of the concerned person. 
  1. On order of the Central Government 

The Central Government may, under the circumstances outlined above, if it deems appropriate and after providing the concerned individual an opportunity to be heard, issue an order for the surrender or cancellation of their Director Identification Number (DIN).

NOTE:

    1. Where there are more than 1 DIN in a person’s name, steps shall be taken to surrender the duplicate DIN
    2. For proofs in any other language other than English/Hindi, proofs shall be translated in English/Hindi by a professional translator carrying his details (viz. name, sign, address) and also his seal
    3. For foreign nationals, translation by notary of home country will also do.

Penalty & Punishment

Section 159 of Companies Act 2013:

If any individual or director of a company makes any default in complying with any of the provisions of section 152, section 155 and section 156, such individual or director of the company shall be liable to a penalty which may extend to fifty thousand rupees and where the default is a continuing one, with a further penalty which may extend to five hundred rupees for each day after the first during which such default continues.

Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article. 

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