Comprehensive Guide to DIR-3 KYC 2019: Compliance for Directors and Entities

Understanding DIR-3 KYC: An Overview

DIR-3 KYC (Know Your Customer) is a mandatory process for directors and designated partners of companies incorporated in India. The Registrar of Companies (RoC) has made it compulsory for all such individuals to submit their KYC details in the prescribed format, known as DIR-3 KYC.

Key Objectives of DIR-3 KYC

• To prevent money laundering and terrorist financing: DIR-3 KYC helps law enforcement agencies identify and investigate suspicious activities related to companies and their directors.
• To maintain transparency in corporate governance: It ensures that companies have accurate and up-to-date information about their directors, enhancing accountability and transparency.
• To strengthen the compliance framework: DIR-3 KYC is a crucial component of India's anti-money laundering and anti-terrorism financing regime, contributing to the overall compliance landscape.

Key Features of DIR-3 KYC

• Submission Deadline: All directors and designated partners were required to file their DIR-3 KYC by September 30, 2019.
• Mandatory for All Directors: Every director, including foreign directors, must file DIR-3 KYC.
• Penalties for Non-Compliance: Companies and directors can face penalties, including fines and disqualification, for non-compliance with DIR-3 KYC requirements.
• Filing through MCA21 Portal: Directors must file DIR-3 KYC electronically through the MCA21 (Ministry of Corporate Affairs) portal.

Transitioning from DIR-6 KYC to DIR-3 KYC

Prior to 2019, directors were required to file DIR-6 KYC. DIR-3 KYC replaced DIR-6 KYC in October 2018, introducing additional requirements and a simplified filing process.

Documents Required for DIR-3 KYC Submission

To complete DIR-3 KYC, directors must provide the following documents:

• Identity Proof: PAN card, Aadhaar card, passport, or voter ID
• Address Proof: Latest bank statement, utility bill, or rental agreement
• Photograph
• Signature
• Director Identification Number (DIN)

Step-by-Step Approach to DIR-3 KYC Filing

1. Obtain DIN: If you do not have a DIN, you must first obtain one through the MCA21 portal.
2. Access MCA21 Portal: Visit the MCA21 portal (https://mca.gov.in/mca21/) and log in using your DIN and password.
3. Navigate to DIR-3 KYC eForm: Click on the "eServices" tab and select "DIN Services" > "DIR-3 KYC eForm."
4. Fill in Director Details: Enter your DIN, name, address, contact details, and other required information.
5. Upload Documents: Upload scanned copies of your identity proof, address proof, photograph, and signature.
6. Pay Filing Fee: Pay the applicable filing fee, which is currently ₹500.
7. Submit eForm: Review the information, verify the documents, and click "Submit."

Common Mistakes to Avoid

• Incomplete or Incorrect Information: Ensure that all information provided in DIR-3 KYC is accurate and complete.
• Late Filing: File DIR-3 KYC before the due date to avoid penalties.
• Ignoring Foreign Directors: Foreign directors are also required to file DIR-3 KYC.
• Using Old DIR-6 KYC Form: Remember that DIR-6 KYC has been replaced by DIR-3 KYC.
• Not Updating KYC Details: Directors are obligated to update their KYC details promptly in case of any changes, such as a change of address or contact details.

Frequently Asked Questions (FAQs)

1. Who is responsible for filing DIR-3 KYC?
   All directors and designated partners of companies incorporated in India.

2. What are the consequences of non-compliance with DIR-3 KYC?
   Companies and directors may face fines, disqualification, and other penalties.

3. Can foreign directors file DIR-3 KYC?
   Yes, foreign directors are also required to file DIR-3 KYC.

4. What is the filing fee for DIR-3 KYC?
   The current filing fee is ₹500.

5. How can directors update their KYC details?
   Directors can update their KYC details through the MCA21 portal by filing an eForm called "DIR-3 Update."

6. Is DSC mandatory for DIR-3 KYC submission?
   No, directors can file DIR-3 KYC electronically using their DIN and password without the need for a DSC (Digital Signature Certificate).

Call to Action

All directors and designated partners are advised to complete their DIR-3 KYC filing at the earliest. By adhering to these KYC requirements, companies and their directors can contribute to maintaining transparency, enhancing corporate governance, and safeguarding India's economic interests.

Humorous Stories and Lessons Learned

Story 1:

Two directors were discussing DIR-3 KYC, and one said, "I'm not worried. I've got my passport ready." The other replied, "That's not enough! You also need to know your father's name." The first director exclaimed, "Oh no! I've been abandoned since birth."

Lesson: Ensure you have all the required documents before filing DIR-3 KYC, including your father's name.

Story 2:

A director, known for his procrastination, waited until the last minute to file DIR-3 KYC. As he rushed to complete the form, he realized he had uploaded his dog's photograph instead of his own. The MCA21 portal promptly rejected his eForm with the message, "Woof! That's not a valid ID."

Lesson: Start the DIR-3 KYC filing process well in advance to avoid any last-minute mishaps.

Story 3:

One director forgot to pay the filing fee for DIR-3 KYC and was horrified to receive a notice from the RoC demanding a penalty. He rushed to the nearest bank, but the queue was so long that he ended up fainting from sheer frustration.

Lesson: Remember to pay the DIR-3 KYC filing fee promptly to avoid penalties and save yourself from fainting in long queues.

Useful Tables

Table 1: DIR-3 KYC Filing Deadline

| Filing Deadline | Penalty for Late Filing |
|---|---|---|
| September 30, 2019 | ₹500 per day of default, up to a maximum of ₹50,000 |

Table 2: DIR-3 KYC Filing Fees

| Filing Fee |
|---|---|---|
| ₹500 |

Table 3: Documents Required for DIR-3 KYC

| Category | Document |
|---|---|---|
| Identity Proof | PAN card, Aadhaar card, passport, or voter ID |
| Address Proof | Latest bank statement, utility bill, or rental agreement |
| Other | Photograph, signature, DIN |