E Form INC 22A (ACTIVE) MCA Company KYC Drive By CS Tarun Sharma


Ministry of Corporate Affairs has introduced Active Company Tagging Identities and Verification, under its ongoing series of actions against the Shell Companies. Following are the provisions of Rule 25A in Companies Incorporation Rules 2014, introduced for governing ACTIVE.
 
Key Provisions:

Applicability
: It is mandatory for every company, be it a private company, public company or listed company, incorporated on or before December 31, 2017, to file the particulars of the company and its registered office, in e-Form ACTIVE;

However, Following Companies are not required to file e Form ACTIVE:

  1. Companies which are Struck off or are under the process of striking off; or
  2. Companies under Liquidation; or
  3. Companies which have been amalgamated or dissolved.
Due Date: The e-form ACTIVE is to be filed on or before 25.04.2019, without a filing fee. However, the filing of e-form ACTIVE after 25.04.2019 will attract a filing fee of Rs 10,000;

Compliance of Governance Provisions & enhanced KYC
: Following Mandatory Fields have been included in the E-Form ACTIVE, with the apparent purpose of ensuring compliance with basic yet critical provisions of Governance & making KYC more effective.
 
  1. Filing of Financial Statements & Annual Return;
  2. Appointment of Auditors, as applicable under the Companies Act, 2013;
  3. Photograph of Registered Office showing external building and inside office, also
showing therein at least one director/ KMP who has affixed his/her DSC, shall be
attached with the e-form;

  1. Appointment of Key Managerial Persons (KMPs) such as MD/CFO/CS, if it is
mandatory or the company under the Companies Act to appoint such KMP;
 
The process may result in the identification of non-compliant & /or Shell Companies:

  • Geotagging & Picture of Director & Registered Office: The form requires submission of longitude & latitude of the registered office. Another way of effective KYC, too many offices at a given longitude & latitude may be used as an indicator of possible Shell Companies.
  • Signing of E Form ACTIVE: The form is to be digitally signed by one director and one KMP. Further, the Form is to be Certified by a Practicing CS/CA/ICWA.
Consequences of Non-Compliance:

In case a company does not files e-form ACTIVE on or before 25.04.2019, the Company shall be marked as "ACTlVE- Non-Complaint" on or after April 26, 2019. Such marking of ACTIVE Non Compliant will have the following consequences:
 
  • Removal of Name from Register of Companies: It will make the Company liable for removal of name from the Register of Companies under Section 12(9) of the Companies Act 2013, by the Registrar.
  • Non Recording of Key Events: No request for recording the following event-based information or changes shall be accepted by the Registrar from such companies:
               ⊕ Change in Authorized or Paid-up Capital;
               ⊕ Changes in Director except for cessation;
               ⊕ Change in Registered Office;
               ⊕ Amalgamation, de-merger etc.

  • Penalties & Prosecutions: Other consequential penalties & prosecution, as may be applicable as per the facts of the case.
Inserted Rule 25A:

[25A. Active Company Tagging Identities and Verification (ACTIVE)

(1) Every company incorporated on or before December 31, 2017, shall file the particulars of the company and its registered office, in e-Form ACTIVE  (Active Company Tagging Identities and Verification) on or before 25.04.2019.

Provided that any company which has not filed its due financial statements under section 137 or due annual returns under section 92 or both with the Registrar  shall be restricted from filing  e-Form-ACTIVE unless such company is under management dispute and the Registrar has recorded the same on the register:

Provided further that companies which have been struck off or are under the process of striking off or under liquidation or amalgamated or dissolved, as recorded in the register, shall not be required to file e-Form ACTIVE:

Provided also that in case  a company does not intimate the said particulars, the Company  shall be marked as “ACTIVE-non-compliant” on or after April 26, 2019, and shall be liable for action under sub-section (9) of section 12 of the Act:

Provided also that no request for recording the following event-based information or changes shall be accepted by the Registrar from such companies marked as “ACTIVE-non-compliant”, unless “ e-Form ACTIVE”  is filed -

(i)   SH-07 (Change in Authorized Capital);
(ii)  PAS-03 (Change in Paid-up Capital);
(iii)  DIR-12 (Changes in Director except cessation);
(iv) INC-22 (Change in Registered Office); and
(v)  INC-28 (Amalgamation, de-merger.
 
(2)  Where a company files “e-Form ACTIVE”, on or after  April 26, 2019, the company shall be marked as “ACTIVE Compliant”, on payment of the fee of ten thousand rupees.

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