The Impact of Deactivated Director Identification Number (DIN) on Company Directorship

When a Director Identification Number (DIN) is deactivated, the individualrsquo;s ability to function as a director is significantly restricted during the period of deactivation. This article explores the implications of DIN deactivation and the circumstances under which a deactivated DIN can still allow an individual to continue as a director.

What is a Director Identification Number (DIN)?

A Director Identification Number (DIN) is a unique personal identification number issued by the Ministry of Corporate Affairs (MCA) in India. It is a mandatory requirement for anyone wishing to serve as a director in a company. The DIN facilitates seamless communication between a director and the Registrar of Companies (ROC) and ensures compliance with various corporate governance requirements.

Consequences of Deactivation of DIN

When a DIN is deactivated, the individual is essentially barred from performing any official functions as a director. Key points to note include:

The deactivated director cannot attend board meetings or sign any documents. The individual cannot perform any duties or responsibilities associated with being a director. The company is required to file fresh DIN for any changes in directorship, as the deactivated DIN cannot be used for these purposes.

However, deactivation of DIN does not automatically disqualify an individual from continuing as a director of the company. As long as the individual fulfills their duties and responsibilities as required by law, they can still technically continue in their role. The only practical limitation is the inability to use the DIN for certain official communications.

Reactivation of Deactivated DIN

To regain the ability to act as a director and to use the DIN, the individual must resolve the issues that led to the deactivation. This process typically involves:

Addressing the specific reasons for deactivation:For example, in the case of non-compliance with Know Your Customer (KYC) norms, the director must ensure compliance with the required procedures. Validating personal information:Uploading updated and verified KYC documents with the MCA to reinstate the DIN. Conferring with legal counsel:Seeking assistance from a qualified professional to navigate the complex legal procedures.

The Relevance of DIR KYC Regulations

The provisions of the DIR KYC regulations do not explicitly disqualify a director who has a deactivated DIN. According to regulatory guidance, the individual can still continue as a director, although their DIN may be unusable for filing documents. This means that an individual can remain actively involved in company operations and board functions despite the deactivated status of their DIN.

Conclusion

The deactivation of a Director Identification Number (DIN) does not automatically disqualify an individual from continuing as a director. However, the deactivated status effectively hinders the directorrsquo;s ability to perform official functions. To reinstate full functionality, the individual must resolve the issues that led to the deactivation and reapply for a new DIN. Companies should be aware of the regulations and requirements to ensure their compliance with corporate law and maintain smooth operations.