What is Director Identification Number (DIN)
Director Identification Number (DIN) was introduced in India by the enactment of the Companies (Amendment) Act, 2006. The amendment received the President’s assent and came into effect on 12 January 2007. A Director Identification Number (DIN) is a unique 8-digit alphanumeric number issued by the Ministry of Corporate Affairs (MCA) in India to individuals who wish to become directors of companies. It is a mandatory requirement for anyone who wants to hold the position of director in an Indian company.
A. Provisions under the Companies Act 2013
- As per Section 153 of the Companies Act, 2013 :
Every individual who intends to be appointed as a director of a company shall apply to the Central Government for allotment of Director Identification Number in such form and manner and together with such fees as may be prescribed.
- As per Section 155 of the Companies Act 2013 :
No natural person who has already been allocated a director identification number under Article 154 may apply for, obtain or possess another director identification number.
- Rule 11 of Companies Appointment and Qualification Of Directors Rules 2014: Surrender of Director Identification Number (DIN) :
The Central Government or the Regional Director (Northern Region), Delhi or any officer authorized by the Regional Director may, if satisfied with the verification of particulars or documentary evidence attached to the application received along with the fee specified in the section of the Societies (Registration Authorities and Fees) Rules, 2014] from any person, cancel or disable the DIN.
B. CAN A PERSON HOLD MULTIPLE DIRECTOR IDENTIFICATION NUMBER (DIN) ?
DIN was introduced to improve corporate governance, track and monitor the activities of company directors and prevent individuals from holding office multiple times without proper disclosure. It is the key identification number for directors in Indian companies since its introduction in 2007.
It follows that if a person holds more than one DIN, the purpose of introducing DIN is futile. The specific section, ie. 155 of the Companies Act 2013, talks about the prohibition of obtaining more than one director identification number which is an offense under 159 of the Act.
C. REMEDY
If a person has more than one DIN. Such a person should then immediately apply for surrender of one DIN to the Regional Director in accordance with the set out provisions. As per the provisions of Rule 11 of Companies Appointment and Qualification of Directors Rules 2014, a person may surrender his DIN if the DIN is found to be duplicate for the same person, provided that the particulars relating to both DINs are merged with the validly held number.
D. CONSEQUENCES OF HAVING MULTIPLE DIRECTOR IDENTIFICATION NUMBER (DIN)
A person cannot have more than one DIN. If a person applies for more than one DIN, it will be treated as non-compliance under Section 155 of the Companies Act, 2013. The penalty for Section 155 is mentioned in Section 159.
- Penalty Under Section 159
As per Section 159, 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 during which such default continues.
- ADJUDICATION
There is an order passed by ROC Chennai in case of Shri Thiyagarajan Parthasarathy u/s 454 for non-compliance of Section 155 and wherein the imposed penalty was as follows:
Company / Officers to whom penalty imposed | Total Period Of Default | Penalty For Default (Rs.) as per section 159 of The Company Act 2013 | Additional penalty for continuing default | Penalty imposed (Rs.) |
On Shri Thiyagarajan Parthasarathy | 907 Days | Rs. 50,000 + Rs. 500 each day for continuing default | 500×907 = 4,53,500 | 5,03,500 |
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| TOTA L | 5,03,500 |
The case of Shri Thiyagarajan Parthasarathy highlights the serious consequences of not adhering to these regulations, as he faced a substantial penalty for non-compliance with Section 155. To avoid such repercussions, individuals must promptly surrender duplicate DINs to the Regional Director. Overall, maintaining the integrity of the DIN system is vital for ensuring the credibility and accountability of directors in Indian companies.
Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement
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