Companies Act Section 157

Companies Act Section 157: Company to Inform Director Identification Number (DIN) to Registrar

Section 157 of the Companies Act, 2013 establishes a requirement for companies to inform the Registrar of Companies (RoC) about the Director Identification Number (DIN) of their directors. This provision is aimed at ensuring that the Registrar maintains an accurate and up-to-date record of all individuals serving as directors in companies. It emphasizes the obligation of the companies to furnish the DIN within a specified period after receiving the intimation of the DIN from their directors under Section 156.

The Director Identification Number (DIN) is a unique identifier issued by the Central Government to individuals who wish to become directors in companies. Section 157 mandates that every company, upon receiving the DIN from its directors, must report this information to the Registrar in a timely manner, ensuring that the director records held by the Registrar are comprehensive and current.

1. Obligation to Inform the Registrar

The first important requirement under Section 157 is that every company is obligated to inform the Registrar of Companies (RoC) about the Director Identification Number (DIN) of all its directors. This must be done within fifteen days of receiving the intimation of DIN from the individual directors as required by Section 156.

a. Purpose of the Obligation

This section ensures that the Registrar has an updated and accurate database of all individuals who are directors of companies. It helps in maintaining transparency and facilitates easy identification of directors by authorities and stakeholders. The Registrar relies on this information for regulatory compliance, legal checks, and for monitoring corporate governance.

b. Time Frame

The law specifies that this intimation to the Registrar must take place within a strict timeline of fifteen days from the date the company receives the DIN from its directors. The fifteen-day window is designed to ensure that companies provide updated director information promptly. Timely reporting aids in keeping company records accurate and reduces the risk of legal or administrative issues arising due to outdated or incomplete records.

2. Form and Manner of Intimation

The intimation of the DIN to the Registrar must be furnished in the manner and form prescribed by the Central Government. This means that companies are required to follow specific guidelines regarding how they report the DIN information.

a. Form Prescribed

The Central Government may issue specific forms that the company must use to submit the DIN information to the Registrar. These forms are designed to collect and present the required data in a standardized way to ensure consistency and compliance.

b. Manner of Submission

The manner of submission includes how the company must transmit the DIN information. This could involve submitting forms through electronic means via the Ministry of Corporate Affairs (MCA) online portal, as this is a commonly used method for regulatory filings in India. However, other prescribed methods may also be employed, depending on the nature of the submission and the regulations laid out by the Central Government.

3. Fees for Intimation

In addition to the requirement for submitting the DIN information, companies must also pay a fee as prescribed by the Central Government for filing this intimation. The government may also specify additional fees to be paid in case of delayed filings.

a. Basic Filing Fee

A prescribed basic fee is charged for companies to submit the DIN intimation. This fee is typically set to ensure that there is a structured and regulated process for filing this critical information.

b. Additional Fees for Delayed Filing

If the company fails to submit the DIN information within the specified fifteen-day period, additional fees may be applicable. These additional charges are intended to incentivize timely filings and penalize non-compliance. The government may determine the additional fees based on the length of the delay and other relevant factors.

4. Penalties for Non-Compliance

Section 157 provides for strict penalties in case of non-compliance with the requirement to inform the Registrar about the DIN within the prescribed time limit. If a company fails to furnish the DIN details within the required timeframe, both the company and its officers in default will be liable to penalties.

a. Penalty for the Company

If the company does not submit the DIN to the Registrar within the stipulated fifteen-day period, the company will be liable for a penalty of twenty-five thousand rupees. This fine is intended to encourage companies to comply with the legal obligation and ensure that their records are updated promptly.

b. Additional Penalty for Continuing Failure

If the company continues to fail in submitting the DIN information after the initial penalty, an additional penalty of one hundred rupees per day is levied for each day of continued non-compliance. This additional fee is applicable until the company fulfills its legal obligation to inform the Registrar. However, the penalty will be capped at a maximum of one lakh rupees. This provision is designed to ensure that companies take immediate action to rectify their failure to comply with the law and to discourage any delays in fulfilling their obligations.

c. Penalty for Officers in Default

In addition to penalties imposed on the company, officers in default (such as directors or key management personnel responsible for compliance) will also be liable to penalties under this section. Each officer who is in default will face a penalty of not less than twenty-five thousand rupees, with the same additional penalty of one hundred rupees per day for continued failure, subject to a maximum penalty of one lakh rupees.

The penalty for officers in default ensures that the responsibility for compliance is not solely on the company but also on the individuals who are responsible for ensuring the company follows the legal requirements.

5. Impact on Corporate Governance

The requirement for companies to report the DIN of their directors to the Registrar and the penalties for non-compliance underscore the importance of accurate record-keeping in corporate governance. Ensuring that the Registrar has access to correct DIN information helps regulatory authorities verify the authenticity of directors, track their activities, and maintain corporate accountability.

This provision also serves as a check and balance mechanism to ensure that companies are transparent in their reporting and that their director information is accessible and verifiable. This contributes to a more regulated corporate environment and strengthens the overall governance framework in the country.