DIN i.e. Director’s Identification Number is compulsory for all the directors. It is just like an identity proof of a director. DIN is allotted by a simple procedure i.e. filling forms and submitting with necessary documents and requisite fees on MCA Portal. Today in this article we will discuss that if a person who wishes to be a Director can apply for DIN Application before Incorporation of the Company or not? So, let us see the details.
Meaning of DIN
DIN is allotted to a person who wishes to become a Director in a Company. As per provisions of the Companies Act DIN is mandatory for any director. Following are the basic provisions regarding DIN as per Companies Act, 2013–
- A director should intimate DIN to all the companies he is a director in.
- The Company should inform the DIN to ROC . The failure to submit DIN can lead to a penalty of Rs.25000-Rs.1,00,000/-
- No person can take more than one DIN.
- It is mandatory to mention DIN in any return, information or particulars that contain reference to a director.
When can a person apply for DIN?
As mentioned above, every person who wants to become the director of a Company has to Obtain DIN. As per provisions of the Act, any company has to inform its first directors along with the incorporation application. With the incorporation application, a company can apply for a maximum of 3 directors. So, according to this there are two possible scenarios, when a person needs DIN.
- If a Person wants to become the First Director in a Company
- When a person wants to become director in a Pre-Existing Company.
In first situation the application of Directorship will be before incorporation of the Company. Now, we will discuss the procedure of obtaining DIN in first case.
Procedure of Obtaining DIN
The person who wishes to become first director of the company has to apply for DIN through SPICe. SPICe stands for Simplified Procedure for Incorporating a Company. It is mandatory for a new company to apply DIN through this form, i.e. INC-32(SPICe).
The Company can add names of the proposed first directors in Form INC-34(SPICe)
The person needs to attach following documents along with Application for DIN:-
- Proof of Address
- Proof of Identity
DIN allotment will be done after approval of the form.
After submission of documents and payment of required fees the application will be verified. Once the application is verified and approved, DIN will be allotted. As per provisions of the Act, application has to be processed within 1 month.
In case there is any change required in the particulars on a later stage then, the person needs to file DIR-6 e-form. The proofs supporting the required change should be submitted. Applicant needs to give a certificate from a practising CA/CWA/CS in whole time practice or Director of the Company. The application should be digitally signed by the applicant.
Is it possible to apply DIN before Incorporation of Company?
From the above discussion we can say that one can apply DIN before Incorporation of the Company. However, such instance can happen only when the person is proposed as one of the first directors of the company.
Therefore, we can interpret that law does not allow any person to take DIN and keep it. Because when a person applies DIN he can do it only by mentioning the company’s name (either new or existing). In case of a new company only 3 names can be given as first directors. So, for 1 company at most only 3 people can apply for DIN before Incorporation of the Company.
Any person who is not becoming part of any company (either new or existing) cannot apply for DIN.
After above discussion we can say that DIN is an identification number is valid only if one is associated with a company. A person can apply for DIN before incorporation of a company and become first director of the company. The procedure to be followed to apply for DIN before incorporation of company is also discussed. The names of the persons that are mentioned in Incorporation application can only apply for DIN as per above procedure. The procedure is entirely online and easy to follow. Out Team at Goyal Mangal & Company will be pleased to assist you in the same.