CONCEQUENCIES OF
NON-FILING OF DIR 3 KYC
Rule 12A and Rule 11(2) and (3) of The Companies Appointment and
Qualification of Directors Rules, 2014
(07th August 2023)
SHORT SUMMARY:
The
Rule for DIR 3 KYC has been notified effect from 10th July, 2018. MCA has
notified Companies ((Appointment and Qualification of Directors) fourth
Amendment Rules, 2018
Every
Director who has been allotted DIN as on or before 31st March of a financial
year submits e-form DIR-3KYC with Central Government.
If
a Person fails to file DIR-3 KYC within due date. MCA21 system will mark their DINs
against which DIR-3 KYC form has not been filed as ‘Deactivated’ with
reasons as ‘Non-filing of DIR-3 KYC’
After
the due date filing of DIR-3 KYC in respect of such deactivated DINs shall be
allowed upon payment of a specified fee of Rs. 5,000/- only, without prejudice
to any other action that may be taken
However, main question of
discussion is i.e. what are the consequences/ effects/ impact on Company, if
any director of company fails to file its DIR-3 KYC?”
As
if a person fails to file DIR-3 KYC his/ her DIN shall be ‘Deactivate’ on the
records of the MCA. Following are the
impacts on Directors:
i.
He can’t’ be appointed as a director in
any new Company or LLP.
ii.
He can’t resign from any Company or LLP.
iii.
He can’t mention his DIN on any document
in relation to the Company.
i.
Company shall not be able to file any
annual form like AOC-4 and MGT-7 with ROC.
ii.
The company shall not be able to file
any other form with DSC of director whose din has been deactivated.
iii.
Company shall not be able to get any dox
signed from such Director and mention his DIN no.
CONCLUSION:
It
is very important from the point of view of the DIN Holder and Company to file
the DIR 3 KYC within the required time. If DIN holders file KYC within the due
date, there are no fees. But if they file after the due date, they have to pay
additional fees of INR 5,000. Fees are one part; there are other consequences,
as mentioned above. Therefore, it is advisable for all professionals to
complete the filing of DIR 3 KYC for all their clients as soon as possible
without waiting for the last date.
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company
Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
Disclaimer: The entire contents of this document have been prepared based
on relevant provisions and as per the information existing at the time of the
preparation. Although care has been taken to ensure the accuracy, completeness,
and reliability of the information provided, I assume no responsibility,
therefore. Users of this information are expected to refer to the relevant
existing provisions of applicable Laws. The user of the information agrees that
the information is not professional advice and is subject to change without
notice. I assume no responsibility for the consequences of the use of such
information.
IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THE INFORMATION