New procedure for DIN allotment under consideration

Director Identification Number (DIN)
is a unique identification number allocated to an individual who is an existing
or a potential Director of any Indian company.

The government is considering a
proposal to brush up the process of DIN allotment. Under the proposal, DIN will
be issued to a person only at the time of his appointment as a Director in
companies provided such a person does not possess a DIN before such
appointment.

Under the existing procedure,
companies which are already in existence will be permitted to apply for DIN of
proposed director by filing the form DIR-3 (Application for DIN). DIN’s
application for the proposed first directors of new companies will be endorsed
upon filing of SPICe forms and ratification of the said forms.   

Certain supplementary proposals are
also under deliberation as follows:

·       To
modify DIR-3 to permit allotment of upto 2 new DINs exclusively for ‘Producer
Companies’ as SPICe provides for upto 3 new DINs.

·       To
temporarily suspend allocation of new DINs for Designated Partners/Partners of
LLPs with effect from 26th January 2018 till 31st March 2018 to facilitate
modifications in LLP eforms as a consequence of depreciation in DIR-3.

·       Introduction
of SPICe form for incorporation of company with effect from January 26th, 2018
– with indispensable provision for incorporating Producer Companies and
condemnation of Form INC-7 for incorporation of companies.

These proposed modifications are aimed
at ensuring allotment of DIN at the time of director appointment and avert
unsystematic allotment of DIN to the directors and cut down trivial and
outdated steps involved under DIR-3 with the objective to expedite DIN
allocation process.

Research inputs by Paruchuri Baswanth
Mohan

 

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About the author :

Bhumesh Verma is a lawyer with over 2 decades of experience in advising domestic and international clients on corporate transactions (M&A, Venture Capital, Private Equity, Startups, corporate advisory, etc.) and features in “The A-List – India’s Top 100 Lawyers” by India Business Law Journal. He keeps writing frequently on FDI, M&A and other corporate matters and is a guest faculty as well. He can be reached at bhumesh.verma@corpcommlegal.com.