26 Feb Applying for DIN before Incorporating a Company: Procedure and Requirements
The Director’s Identification Number (DIN) serves as a vital identity proof for directors within a company. It was a mandatory requirement, and obtaining it involved a straightforward process of filling out forms and submitting necessary documents and fees through the MCA Portal. This article explores the feasibility of applying for a DIN before incorporating a company.
Understanding DIN:
DIN is a unique identifier assigned to individuals aspiring to become directors in a company. According to the Companies Act of 2013, it is a prerequisite for any individual intending to hold a directorship position. The key provisions concerning DIN include:
- Directors must disclose their DIN to all companies they serve.
- Companies are obligated to report the DIN to the ROC. Failure to comply may result in penalties ranging from Rs.25,000 to Rs.100,000.
- Individuals are prohibited from holding more than one DIN.
- DIN must be referenced in any return, information, or particulars related to a director.
When Can One Apply for DIN?
Every individual aiming to become a company director must obtain a DIN. As per the Act, companies are required to nominate their initial directors during the incorporation process. Typically, a company can apply for a maximum of three directors during incorporation. Therefore, there are two scenarios when a person needs a DIN:
- When aspiring to become the first director in a newly formed company.
- When intending to join as a director in an existing company.
In the first scenario, the application for directorship occurs before the company’s incorporation. Now, let’s delve into the process of obtaining a DIN in this case.
Procedure for Obtaining DIN:
Individuals aspiring to be the first directors of a company must apply for a DIN using the SPICe (Simplified Procedure for Incorporating a Company) form, i.e., INC-32 (SPICe). The company can include the proposed first directors’ names in Form INC-34 (SPICe).
The applicant must submit the following documents along with the DIN application:
- Proof of Address
- Proof of Identity
- Photographs
DIN allotment occurs upon approval of the form. After submitting the documents and requisite fees, the application undergoes verification. Once verified and approved, DIN is allotted within a month, as per statutory provisions.
Should any changes be necessary later on, the individual must file the DIR-6 e-form, along with supporting proofs. A certificate from a practicing CA/CWA/CS or a Director of the Company, along with a digitally signed application, is required.
Feasibility of Applying for DIN before Incorporation:
Based on the discussion above, it’s evident that applying for a DIN before incorporating a company is possible. However, this is only applicable when the individual is proposed as one of the first directors of the company.
Hence, it’s clear that the law does not permit individuals to obtain a DIN without association with a company. Each DIN application must specify the company’s name, whether new or existing. In the case of a new company, only three individuals can apply for DIN before incorporation.
Conclusion:
In conclusion, a DIN is valid only when associated with a company. Individuals can indeed apply for a DIN before incorporating a company and assume the role of the first director. The online procedure for applying for a DIN before incorporation has been elucidated. Only individuals mentioned in the incorporation application can apply for a DIN using the specified procedure. The process is streamlined and accessible online.
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