Director Compliance in India: Essential Filings for Companies
Ensuring director compliance is crucial for companies operating in India. The Companies Act, 2013 mandates specific compliance requirements for directors, including DIR-3 KYC, MBP-1, and MGT-8. Non-compliance can lead to penalties and disqualification. Below is a detailed breakdown of these essential director compliance filings.
DIR-3 KYC: Director KYC Filing
DIR-3 KYC is an annual compliance requirement for all directors holding a Director Identification Number (DIN). The Ministry of Corporate Affairs (MCA) mandates this filing to verify and update the personal details of directors.
Who Needs to File?
Every individual who holds a DIN as of March 31 of a financial year must submit DIR-3 KYC by September 30 of the same year.
Documents Required
- PAN Card
- Aadhaar Card
- Passport (if applicable)
- Address Proof (Utility Bill/Bank Statement)
- Email ID and Mobile Number (OTP verification required)
Penalty for Non-Compliance
Failure to file DIR-3 KYC leads to deactivation of DIN, and a penalty of INR 5,000 is levied for delayed submission.
MBP-1: Director's Disclosure of Interest
MBP-1 is a mandatory disclosure by directors of their interest in other entities. This filing ensures transparency and prevents conflicts of interest in business operations.
Who Needs to File?
Every director of a company must file MBP-1 at the first board meeting of the financial year or upon appointment.
Key Details Required
- List of companies, LLPs, or firms where the director has a financial interest.
- Shareholding details in other companies.
Penalty for Non-Compliance
Failure to disclose interests may result in penalties under Section 184 of the Companies Act, 2013, including fines and potential disqualification.
MGT-8: Certification by a Practicing Company Secretary
MGT-8 is a compliance certification provided by a practicing company secretary for listed companies and certain prescribed companies. It certifies that the company has complied with legal provisions under the Companies Act, 2013.
Who Needs to Obtain MGT-8?
- Listed companies
- Public companies with paid-up share capital of INR 10 crore or more
- Companies with turnover exceeding INR 50 crore
Key Aspects Covered in MGT-8
- Compliance with secretarial standards
- Proper maintenance of statutory registers
- Adherence to corporate governance norms
Penalty for Non-Compliance
Non-compliance can lead to legal scrutiny, penalties, and reputational risks for the company and its directors.
Key Timelines
DIR-3 KYC
Annual filing by September 30
MBP-1 Filing
First board meeting or upon changes
Board Meeting
Disclosure of interests noted in minutes
MGT-8 Certification
Within 60 days from end of financial year
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