DIN-3 CERTIFICATION – EXCLUSIVELY TO CS – REQUIRING SERIOUS RECONSIDERATION
The Ministry of Company Affairs, Government of India has recently notified DIN-3 to be mandatory submitted by all the companies to the Registrar of Companies on or before 7th December, 2006, wherein the companies are required to inform the DIN (Director Identification Number) of their Director to Registrar of Companies through MCA-21 Portal, duly certified by:
- A Company Secretary in full time practice or
- A Company Secretary in employment of the concerned Company
It may be noted that the Chartered Accountants or Company Secretaries are permitted to certify all the forms under MCA 21 requiring certification so far and this is the first time that the Chartered Accountants in practice are not recognized by Ministry of Company Affairs for authenticating DIN-3. As a matter of principle, this is a serious departure. The Chartered Accountants have been rendering valuable services to the corporate sector including incorporation of companies, company law compliance's, filing of various forms, maintenance of statutory records, representing before the Hon’ble Company Law Board and Ministry of Company Affairs for obtaining various approvals and similar other services. The CA Course Curriculum and 3- years practical training provide an expert knowledge to Chartered Accountants to provide valuable services in the corporate law sector including Company Law, SEBI Act, Competition Act and various other Economic and Corporate legislations.
The Chartered Accountants fraternity need to take up with Ministry of Company Affairs that Chartered Accountants cannot and should not be distinguished, while providing various key services to the corporate sector and it may be completely inappropriate to provide exclusivity to the Company Secretaries in relation to any professional service related to Company Law. It may be noted that 4 members of the Central Council out of 12 elected members recently resigned few months ago from the Membership of the Central Council of ICSI in protest against the Ministry of Company Affairs not providing exclusivity to Company Secretaries for certifying various forms under MCA-21. The provision of exclusivity to Company Secretaries in certifying DIN-3 is being viewed as a result of these pressure tactics, which is highly unfortunate. It may be noted that the compliance certification of listing guidelines including corporate governance were earlier exclusively reserved by SEBI in favour of Chartered Accountants and in-spite of several aspects requiring deep knowledge of financial accounting and financial matters, Company Secretaries in whole time practice have also been permitted to certify corporate governance compliance. The corporate law services provide a very important, challenging and promising avenue for the profession of Chartered Accountants and those who are able to have specialized knowledge are able to command a very good respect, seniority and professional standing. It may be necessary for the Institute of Chartered Accountants of India and various Chartered Accountants’ Associations to project Chartered Accountants as highly competent professionals having holistic knowledge of corporate law and affairs with an in-depth understanding of financial nitty gritty to take challenges of complex business dimensions in a comprehensive approach to derive the best results.
- ICAI may consider prescribing corporate law standards and issuing guidance note on various aspects of Company Law and various other corporate law compliance's, procedures and complex aspects of such laws as may be considered important from time to time.
- A guidance note on MCA21 certification may be issued urgently.
- CA professional bodies may consider publishing advertisements, pamphlets, brochures and similar other publicity materials outlining various important aspects of professional services being provided by Chartered Accountants to the corporate fraternity.
- To publish easy to understand handbook and guides to enable provisioning of complex as well as routine corporate law services by Chartered Accountants to their clients. This may include procedure, forms, compliance and practical tips as well as check-list to enable Chartered Accountants to easily provide various services in a standardized manner.
We need to strengthen our competitive positions in the corporate law sector consciously and actively.