Digital Signatures and DIN

Digital Signatures

What is a DSC? Where is it used?
A Digital Signature Certificate (DSC) is a formal & legal, electronic transformation or form of the physical signature, which is easily presented electronically and digitally to access information on the internet, or to prove the identity of or sign certain documents.

Why is the DSC necessary?
The Digital Signatures have become compulsory after 16th September 2006, for filing the e-Form1A and other related documents prescribed under the Companies Act, 1956.

Where from to get the DSC?
DSC is obtained from any of the licensed ( by the Ministry of Corporate Affairs, MCA) Certifying Authorities such as TCS, SIFY, MTNL, etc., and these can be had without obtaining DIN. Digital Signatures are fully valid formally and legally, and validity of these varies from one to two year.

What are the uses of DSC?
However, both DIN and DSC are pre-requisite for filing any document connected with the MCA. Hence, the digital signatures of the managing director or director, or manager, or the secretary of the Company must be obtained beforehand, for signing the e-Form1A and other concerned documents.

Director Identification Number (DIN)

1. Application for allotment of Director Identification Number(DIN)
The Company (Amendment) Act, 2006 has inserted the section 266A through the Notification number- G.S.R. 648E dated 19th October 2006, and which shall be effective from 1st November 2006, provides that-

(a) Every person desirous of becoming Director of a private or public company, or
(b) Every Director of a company appointed before this Companies (Amendment ) Act, 2006,

shall be required to apply for the allotment of the Director Identification Number(DIN) to the Central Government of India as per the Form DIN-1. Every individual who has applied for the DIN, can be duly appointed as the director in any company, or can hold office of the director till the DIN is allotted to them.

2. Allotment of Director Identification Number
The section 266B of the Company (Amendment) Act, 2006, forces the Central Government for allotting the DIN to every applicant, within a period of one month after the receipt of Form DIN-1.

3. Obligation on the Director to intimate DIN to concerned company or companies

Section 266D of the Company (Amendment) Act, 2006, obligates all the existing directors that they must intimate the receipt of the DIN allotted to them from the Central Government, to the company or companies they are appointed Directors to, within one month of receipt of the DIN, according to the Form DIN-2.

4. Salient Features of Director Identification Number (DIN)

(i) Every person or individual intending to be appointed as the Director of a company must apply for the DIN, or should have the DIN obtained beforehand

(ii) DIN application is to be duly supported with identity proof, duly attested photocopies of any of the following viz. PAN card, Driving License, Passport, Voter ID Card, Ration card, Electricity Bill and Bank Statement, required to be filed with the DIN application.

(iii) DIN application must be supported with the proof of residence of the applicant director which could be any one of the following viz. Passport, Voter Id Card, Ration card, Driving license, Electricity Bill, Telephone Bill and Bank Statement.

(iv) DIN is essential for e-filing of Forms. PAN or other documents can never be used as an alternative to the DIN

(v) DIN is mandatory for all directors who hold office of the director in any national, international, or multi-national company located in India

(vi) Foreign nationals holding the post of the director in any Indian company, is forced by the rules to possess DIN

(vii) Resignation from the post of Directors of one company, does not affect the validity of the DIN or its discretionary powers

(viii) Only one DIN is needed to be appointed as a director of a company, on the basis of which an individual can hold an infinite number of the directorship in various companies. All the successive directorship of a director would be recorded in the database of the DIN

5. Formalities to be complied with for appointment of the first directors
At the time of appointing a director to a company, especially the first directors, the following formalities must be followed scrupulously-

(a) Check the availability of the DIN of the proposed director. In the case of absence of it, Form DIN-1 must be filled in up, and sent to the Central Government, for allotment of the DIN

(b) Observe the filing of e-form 32 in case of the first directors, along with the consent to act as the director of the specified company

(c) E-Form 32 is to be filed at the time of the filing of other documents for incorporation of the company. However, it can be filed within 30 days after the incorporation of the company

(d) Information concerning to the director's interests in other companies, firms or organizations, and also the names of his relatives for the purpose of section 297 and 299 of the Companies Act shall be obtained. A general notice of the interests under section 299 shall also be provided in Form 24AA prescribed under the Companies (Central Government's) General Rules & Forms, 1956.

(e) Particulars regarding the directors must be entered with respect to each director in the Register of Directors

(f) Particulars of the Directors' shareholding shall be entered in the Register of directors' shareholdings,[Section 307]

(g) Any other Agreement, which the company may propose to enter into with any individual, for appointment as its managing director or whole-time director or manager, will be filed with the registrar;

Time Frame in Incorporation

Nature of Activity                                      Time Schedule
1 Allotment of DIN                                            3 days
2 Acquiring Digital Signature                         2 days
3 Name approval                                             3- 4 days
4 Drafting of MOA & AOA, stamping,
digitally signing and filing the documents
on MCA portal                                                   3 days
5 Grant of Certificate of Incorporation          4 days