Eligibility and Deadline for filing
As a crackdown on shell/ inactive companies, the Ministry of Corporate Affairs, vide its notification dated February 21, 2019 (Notification), has mandated a one-time compulsory filing in e-Form Active Company Tagging Identities and Verification (e-Form ACTIVE) by all companies incorporated in India on or before December 31, 2017 with the Registrar of Companies (RoC).
The e-Form ACTIVE needs to be filed with details of the company and its registered office on or before April 25, 2019. The Notification has come into effect from February 25, 2019.
Format of e-Form and Details required
A new e-Form INC-22A has been prescribed for the filing, which requires details in respect of:
- address of registered office of the company (along with latitude and longitude) with a photograph showing external building and inside office, with at least one director(s)/key managerial personnel whose digital signature is affixed to the form;
- details of directors of the company;
- details of statutory auditor and cost auditor, if any, of the company;
- details of the managing director or chief executive officer or manager or whole-time director of the company;
- details of company secretary and chief financial officer of the company;
- forms with financial statements and annual return of the company for financial year 2017-2018, etc.
The e-Form ACTIVE filing is not required by:
- any company which has not filed its due financial statements or annual returns, or both as prescribed under Companies Act, 2013, unless such a company is under management dispute and the RoC has recorded the same on the register;
- any company which has been struck off or are under process of striking off or under liquidation or amalgamated or dissolved, as recorded in the register.
Consequences of non-filing
- In case a company does not file e-Form ACTIVE with the RoC, it will be marked as "ACTIVE-non-compliant" on or after April 26, 2019;
- If the RoC has reasonable cause to believe that the company is not carrying on any business or operations from its registered office address provided, he may cause a physical verification of the same to be conducted. In addition to imposing a penalty of up to INR 100,000 (~ USD 1700) on the company and every officer-in-default, the RoC can even initiate action for removal of name of the company from the register of companies;
- the company will not be able to make
the following filings with the RoC:
- Change in authorized capital;
- Change in paid-up capital;
- Changes in director except cessation;
- Change in registered office;
- Amalgamation, de-merger.
A company may make filing of e-Form ACTIVE on or after April 26, 2019, and it will be marked as "ACTIVE Compliant", on payment of late filing fees of INR 10,000 (~ USD 170).
Link Legal Insights
The intent of the Notification seems to be to clean up the system and remove all defunct/ inactive/ shell companies. As an immediate step, all Indian companies incorporated on or before December 31, 2017 should collate the required details and make the e-Form ACTIVE filing on or before the deadline of April 25, 2019. The consequences of non-filing are onerous and hence the filing should be taken on priority.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.