Revised format of DIR-2

Form DIR – 2 is a document in which an individual declares his consent to be appointed as a Director of a certain company. It is documented proof of this effect. The form contains the name, address, occupation, and contact details of the individual. The DIN and PAN details too are provided in it. It is mandatory to submit the DIR – 2 when filing SPICe INC – 32 on the Ministry of Corporate Affairs portal. Form DIR – 2 .

The Ministry of Corporate Affairs (MCA) revised the Companies (Appointment and Qualification of Directors) Rules, 2014, and notified the Companies (Appointment and Qualification of Directors) Amendment Rules, 2022 in its notice number. G.S.R. 410(E) dated 01.06.2022.

As a precautionary step, the MCA would limit the provisions for Director Appointment to any such person to be appointed in the company who is a national of a country with a land border with India (namely China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan) Along with the permission form, the requisite SECURITY CLEARANCE from the Ministry of Home Affairs, Government of India, should be included for such an appointment.

If this is not done, the following effects will occur: For such a person applying for DIN, no application number will be created (Director Identification Number)

Directors of the company

Directors, the helmsmen of the corporate ship, guide companies through the stormy seas of business. Whether they’re iconic visionaries shaping the future or meticulous strategists ensuring smooth operations, directors are the heartbeat of any organization.

The term “directors” refers to the portion of the board of directors charged with the oversight, management, and control of the company’s operations. Directors serve as stewards of the company’s assets and funds and also act as agents in transactions on behalf of the company.
Section 149 of the Companies Act, 2013 defines the number of directors.

At least two directors must be present in every Limited Liability Partnership.
A maximum of 15 directors in a company can be appointed.
After passing a special resolution at a general meeting, a company can choose more than 15 directors without the approval of the government.

What is DIR-2?

DIR-2, or Director Identification Number Form-2, is the document that directors need to submit to the Ministry of Corporate Affairs (MCA) for their appointment and qualification.Any individual seeking to become a director must provide a declaration of appointment and qualification in Form DIR-2. Form DIR-2 is consent to act as a director of the proposed company. It contains DIN/PAN details, name, address, contact details, and occupation details of each director of the company. It is a mandatory attachment while filing SPICe INC-32 on the MCA portal.

Key Amendments

The first proviso of Rule 8: The first proviso of Rule 8 states that, in addition to the consent of the person seeking appointment as a director on the board of a company, necessary security clearance from the MHA, the Government of India, is required if the person is from any of the countries listed above, i.e., sharing a land border with India.
Rule 10: No application for a Director Identification Number (DIN) would be created if the individual is from a nation that shares a land border with India unless accompanied by a security clearance from the Ministry of Home Affairs, Government of India.
New Declaration/Verification Annexure Form DIR 2 & DIR 3 Insertion:‘I further declare that – I am not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director…’ OR ‘I am required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking appointment as director and the same has been obtained and is attached…’

Impacts of the amendment

The rules are primarily intended to limit Chinese takeovers in India. According to MCA data, there are around 490 foreign citizens registered as directors in Indian corporations, with China accounting for 30% of the total.
Stop other surrounding countries from gaining unwarranted control over Indian businesses.

Revised format of DIR-2 with Declaration

Pursuant to section 152(5) and rule 8 of Companies (Appointment and Qualification of Directors) Rules, 2014. Following is the revised format of DIR-2:

Name of the company

Subject: Consent to act as a Director

I, (Name), hereby give my consent to act as Director of (Name of the company) pursuant to sub-section (5) of section 152 of the Companies Act, 2013 and certify that I am not disqualified from becoming a director under the Companies Act, 2013.

Director Identification Number (DIN):

Name (in full):

Father’s Name (in full):

Permanent Address:

E-mail id:

Mobile no.:

PAN No.:

Occupation:

Date of birth:

Nationality:

No. of companies in which I am already a Director and out of such companies the names of the companies in which I am a Managing Director, Chief Executive Officer, Whole-time Director, Secretary, Chief Financial Officer, and Manager.

Sl. No.	Name of the Company	Designation

Particulars of membership No. and Certificate of practice No. if the applicant is a member of any professional Institute. Specifically, state NIL if none.

Declaration

I declare that I have not been convicted of any offense in connection with the promotion, formation, or management of any company or LLP and have not been found guilty of any fraud or misfeasance or any breach of duty to any company under this Act or any previous company law in the last five years. I further declare that if appointed my total Directorship in all the companies shall not exceed the prescribed number of companies in which a person can be appointed as a Director.

I further declare that –

I am not required to obtain a security clearance from the Ministry of Home Affairs, Government of India before seeking an appointment as director;

Signature:…………………

Designation: Director

Date:

Place:

Attachments:

Proof of identity;

Proof of residence;

Security clearance Certificate

Changes in the DIN (Director Identification Number)

To get a Director Identification Number (DIN), a firm has to register Form DIR-3 on the MCA portal and pay the required fees through the online mode as per the Companies Rules, 2014.
After successfully filling out the form, the system will generate an application number for you.
Any person who is a national of a country that has a land border with India must obtain a DIN before receiving security clearance from the Ministry of Home Affairs.
Directors are required to attach a security clearance from the Ministry of Home Affairs, Government of India,

FAQs

Q: How has the Revised DIR-2 Format improved transparency?

The Revised DIR-2 Format has introduced a more detailed display of personal information and a streamlined declaration process, ensuring transparency in director appointments.

Q: What are the key changes in the DIN application process?

The DIN application process now aligns with the revised DIR-2 Format, creating a more seamless transition from application to appointment.

Q: Are digital signatures now mandatory for DIR-2 submissions?

Yes, the Revised DIR-2 Format mandates the use of digital signatures

Q: What are the key changes in the Director Identification Number (DIN) application process as a result of the amendments?

The DIN application process has been streamlined to align with the Revised DIR-2 Format. This creates a more seamless transition from application to appointment, ensuring directors’ credentials undergo stricter verification.

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