EFFECT of NON filing of DIR 3 KYC

EFFECT of NON filing of  

MCA has notified Companies ((Appointment and Qualification of Directors) fourth Amendment Rules, 2018. These Rules shall came into effect from 10th July, 2018.

MCA21 system will mark all approved DINs (allotted on or before 31st March, 2018) against which DIR-3 KYC form has not been filed as ‘Deactivated’ with reasons as ‘Non-filing of DIR-3 KYC’

Legislature Background:

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 Person fails to file DIR-3 KYC within due date. MCA21 system will mark all approved DINs (allotted on or before 31st March, 2018) 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?”

Impact on Director:

As if 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:

        1.       He can’t’ be appoint as director in any new Company or LLP.
        2.      He can’t resign from any Company or LLP.
        3.      He can’t mention his DIN on any document in relation to Company

 Impact on Company:

                   I.            Company shall not be able to file any annual form like AOC-4 and MGT-7 with ROC.
          II.     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.

(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 on the basis of 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 a professional advice and is subject to change without notice. I assume no responsibility for the consequences of 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


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