All directors need online IDs

Nearly 700,000 companies to be covered.

Directors of nearly 700,000 companies, including all listed, unlisted and private firms, will have to obtain a director identification number (DIN).

This is required for the ministry of company affairs' e-governance project that will be implemented across the country in April.

"If directors do not have a DIN, they will not be recognised and their companies will not be able to file documents online," Company Affairs Minister Prem Chand Gupta said today.

Gupta added that the "MCA 21 e-governance" project required directors to submit an application with a certified proof of identity, including their permanent account number (PAN). The MCA 21 project will kick off from Coimbatore on February 18 and will be rolled out in Delhi by March.

"Although a PAN is not mandatory but once we receive the applications, we can easily find out those directors who have not submitted their PAN numbers," a ministry official said.

The government can use a DIN to find out, for the first time, whether a company director is complying with the provisions of the Companies Act, 1956.

The Act allows a person to be a director in a maximum of 15 companies and a managing director in only one (two, if the position is in a private company or in a subsidiary of a public company).

The impact of this move will be visible in the next three years. This is because manual filing will still continue for a smooth transition to the online filing system. During this period, 53 special kiosks will be set up to facilitate e-filing.

While the Securities and Exchange Board of India's MAPIN database only records details of 8,000-odd listed companies, the ministry's project will cover India Inc. Directors will be required to have digital signatures to use e-filing facilities.

As part of the Rs 345-crore e-governance project, executives who require to sign documents on behalf of their firms will also have to get a DIN. "Records of listed and unlisted public companies will be available for online viewing," the official added.