[Opinion] Company & Directors Face Legal Peril as Inadequate Documentation in Auditors’ Appointment Surfaces

Prof R Balakrishnan – [2023] 151 taxmann.com 386 (Article)

1. Director Identification Number and its Importance

Director Identification Number (DIN) is a unique identification number, allotted by the Central Government to each of aspiring individual who would like to be a director of any company. The DIN number is allotted by the Central Government and is valid for the lifetime of the director. As per the provisions of the Companies Act 2013, an individual should have a valid DIN number for him/her to be appointed as a director in any company. Obviously, it means, any individual who is already a director would be having the DIN number.

It is a mandatory requirement under the provisions of the Companies Act 2013 read with the Rules framed under the Companies (Registration and Fees) Rules 2014 that the DIN number is always required to be mentioned underneath the signature of the director whenever any document, information, or a return would be submitted to the regulator under any law. It is mandatory for any person – generally a company secretary or director in the case of a company – to indicate whenever any documents are filed or intimation is given off on any correspondence (physically or electronically) to mention the name, designation, address, membership number (in case of company secretary) or director identification number (in case of the director), as the case may be, of the person signing such document correctly.

It may be noted that merely with the signature and writing authorized signatory without mentioning the other details as stated above shall not be acceptable by the regulators – which is definitely a non-compliance/violation and therefore, in order to avoid resubmissions/anticipated show cause notice, one must ensure to mention the details i.e. name, address, membership number/director identification number etc., while filing the return, submitting documents and in correspondences addressed to regulators.

2. Provisions under the Companies Act 2013

Pursuant to section 158 of the Companies Act 2013 (Obligation to indicate Director Identification Number – under Chapter XI), every person or company, while furnishing any return, information or particular as are required to be furnished under this Act, shall mention the Director Identification Number in such return, information or particulars in case of such return, information or particulars relate to the director or contain any reference or any director.

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