More Compliances For Companies!
The Ministry of Corporate Affairs (MCA) vide its notification dated 21 February 2019, mandates every company that has been incorporated on or before 31 December 2017, to file e-form INC-22A.
The Active Company Tagging Identities and Verification (ACTIVE), through a new form viz. INC-22A has been initiated based on Rule 25A of Companies (Incorporation) Amendment Rules, 2019.
Purpose Behind Form INC-22A!
Past few years the govt. has been trying to clean the financial sphere and bring in transparency. MCA has taken note of non-compliant companies in full earnestness and as a result already struck off lakhs of companies, resulting in lakhs of directors’ disqualification too.
Form INC-22A is another tool by the regulator to track shell companies and crack down on them, as it calls for filing complete details of the company along with its officers. The requirement of geo-tagging of the registered office of a company is another means through which the regulator can weed out shell companies.
Applicability of Form INC-22A!
All companies incorporated on or before 31 December 2017, except those:
- Companies which are Struck off or are under the process of Striking off.\
- Companies which are under liquidation or amalgamated or dissolved.
The last date of filing was 25 April 2019, but late filing is permitted with a fine of Rs. 10,000.
Director Disqualification Can Lead To More Complications!
One of the main prerequisites of filing E-form INC-22A is that the DIN of all directors of the company should be Active, that is, the directors should have filed their DIR-3 KYC.
This clearly indicates that if any director’s disqualification has occurred, then it needs to be removed and the DIN restored, in order to file E-form INC-22A.
Consequences of Disqualified Director In The Company!
In a scenario where a company needs to comply by filing form INC-22A but one of its director’s DIN is deactivated, then it cannot go ahead and file.
As a result of not filing form INC-22A, the company shall be tagged ‘ACTIVE non-compliant’ on the MCA portal and this will trigger further trouble for the company.
Repercussions of Being Declared ‘ACTIVE Non-compliant’!
- A late fine of Rs. 10,000 will be levied for filing the form after 25 April 2019.
- The registrar may initiate action against such a company under the provisions of Section 12 (9) and Strike it off from the register.
- Most importantly, the company will not be able to undertake event-based filing of these forms.
- SH-7 (Increase in authorized share capital),
- PAS-3 (Allotment of securities),
- INC-22 (Change of registered office),
- DIR-12 (Appointment and change in designation of Directors/KMP. Cessation will be allowed)
- INC-28 (Notice of the order of a court or any other competent authority)
Way Ahead For ‘ACTIVE Non-compliant’ Companies!
Such companies have to realize that they need to act fast and overcome the anomalies that exist and then file INC-22A. Once it is successfully done, then the tag of ‘ACTIVE non-compliant’ will change to ‘ACTIVE compliant’ on the official portal of MCA and it will be able to function smoothly.
Hence, if the reason for not being able to file INC-22A successfully, is a disqualified director of your company, then immediately swing into action and get his DIN activated. As soon as this hurdle is overcome, the filing can be done without any hitch and the restrictions on the company shall be removed. Any slackness on your part will lead to complications along with the sword of action by ROC hanging all the time on the company.
“Remove director’s disqualification at the earliest, otherwise your company may face adverse action like ‘Strike off’ for not filing INC-22A!”
-Shweta Gupta, Founder, and CEO, MUDS