Important announcement for all the businesses in India. MHA approval for DIN and security clearance is now mandatory. Let’s understand all about the security check compulsory for DIN allotment.
Mandatory Security Check for Chinese DIN Allottees
In June 2022, the Indian government amended its several rules for appointment of directors. As a result, now onwards, people from countries sharing land borders with India (China, Pakistan, Bhutan, Myanmar, Afghanistan, Nepal, Bangladesh) must get security clearance from India’s Ministry of Home Affairs (MHA) before:
- Applying for a Director Identification Number (DIN)
- Being appointed as directors in Indian companies.
Why do new directors need to get security clearance?
In order to protect national security, and deter potential threats, the Indian government has now made it mandatory to get security clearance for becoming a director in Indian companies.
Do existing foreign directors need to get security clearance?
Existing directors from the foreign countries who are applying for DIN Renewal or seeking reappointment must get security clearance. New appointments of directors from these countries must get security clearance through an online application form.
What is the process of getting security clearance for a new director appointment?
- The first step is to register and log in to the Ministry of Corporate Affairs (MCA) portal.
- The next step is to go to E-SAHAJ SEWA (direct link) within the MCA portal.
- Then, you need to complete the application form with accurate details (passport, visa, citizenship).
- Lastly, submit the application, keep a copy for your records, and follow up if any technical issues arise.
What’s the effect on your business?
Companies now need to mandatorily integrate this security measure step into incorporations and director appointment processes. Furthermore, they must understand how to use the E-Sahaj Portal. Lastly, the appointment of directors process may take longer and as a result planning and strategizing your incorporation process is essential.
Conclusion
In conclusion, the government is moving towards more strict corporate governance. Considering national security it is important for businesses to stay in compliant with rules and get security clearance for appointment of directors. With careful planning and right guidance from E-Startup experts, businesses can manage the appointment of directors without any hassle.
What are the steps for company registration online in India?
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