Understanding ACTIVE and its difficulties

Dibisha Mishra (dibisha@vinodkothari.com) (corplaw@vinodkothari.com)

 

Ministry of Corporate Affairs (‘MCA’) vide its notification dated 21st February, 2019 brought the Companies (Incorporation) Amendment Rules, 2019 which shall be effective from 25th February, 2019. The aforesaid amendment mandated every company incorporated on or before the 31st December, 2017 to file e-form ACTIVE (Active Company Tagging Identities and Verification) on or before 25th April, 2019.

Further, in view of the practical difficulties faced by the stakeholders, MCA vide its notification dated 25th April, 2019 extended the time limit for filing the said e-form till 15th June, 2019.

This note covers the significant aspects on the ACTIVE form and practical difficulties faced by the stakeholders for bringing the same to the notice of the concerned authorities.

FAQs on e-form ACTIVE

1. Are all companies required to file e-form ACTIVE (‘Applicable Companies’)?

Filing of ACTIVE form is applicable all companies incorporated on or before 31st December, 2017, except

  • companies which have been struck off;
  • companies under the process of striking off;
  • companies under liquidation;
  • companies that are amalgamated or dissolved.

2. What is ACTIVE?

ACTIVE is the e-form that enables MCA to geo-tag the location of the registered office (both interior and exterior) of Applicable Companies. It also ensures that the Applicable Company should have its unique e-mail id not being used by any other company.

3. Are there any pre-conditions for filing?

Applicable Companies shall have to ensure the following before proceeding ahead to file e-form ACTIVE:

  • Filing of all AOC-4 and MGT-7 till date is complete unless such company is under management dispute and the Registrar has recorded the same on the register;
  • Statutory auditor is duly appointed in the company via. E-form ADT-1;
  • Company secretary (if applicable to the company) is duly appointed in the company;
  • Cost Auditor (if applicable to the company) is duly appointed in the company
  • DIN status of all the directors are ‘active’.

4. What documents or details are required to be submitted?

a. Corporate Identification Number;

b. Latitude and Longitude details of the registered office of the Company;

c. E-mail id, in case company wishes to have E-mail id different from that in the master data;

d. Photograph of Registered Office showing external building and inside office also showing therein at least one director/KMP who has affixed his/her DSC to the form;

e. OTP received in the email address.

5. What are the signing and certification requirements?

Form has to be electronically signed by:

  • One director: For OPC
  • Two directors in which one should be KMP (if any): For others

Form need certification a Chartered Accountant or a Cost Accountant or a Company Secretary in whole-time practice.

6. Is there any filing fees?

Fee for filing e-form ACTIVE if filed within 15th June, 2019 is NIL. Thereafter fee of Rs. 10,000/- shall be charged.

7. What are the consequences of non-filing?

Applicable Company which has not filed e-form ACTIVE till due date shall be marked as “ACTIVE-non-compliant” until it is filed. ACTIVE-non-compliant companies shall face the following consequences:

a. Action under sub-section (9) of section 12 of the Act: Registrar may cause a physical verification of the registered office of the company in such manner as may be prescribed and if company is found to be having no registered office, it may initiate action for removal of name of the company from the Registrar.

b. No request for recording the following event based information or changes shall be accepted by the Registrar unless ” e-Form ACTIVE” is filed:

  • SH-07 for Change in Authorized Capital
  • PAS-03 for Change in Paid-up Capital
  • DIR- 12 for Changes in Director except cessation
  • INC-22 for Change in Registered Office
  • INC-28 for Amalgamation or de-merger

 

Few subsisting practical difficulties with the e-form

  1. Applicability of the said provisions to a dormant company: The provisions does not explicitly exempt dormant companies for the ambit of the Rules. However, these companies are unable to file e-Form INC-22A as their status is dormant and form ACTIVE cannot be filed for such status.

 

 

 

  1. Details of Statutory Auditor: Companies are unable to pre-fill details of statutory auditors who were appointed in the FY 2013-14. This is because during this period form ADT-1 had to be submitted as an attachment to e-Form GNL as per directions of MCA General Circular No. 09/2014. Hence, the details of appointment of statutory auditor for such companies are not updated in the electronic records of MCA. Accordingly, the companies are unable to proceed with the filing of INC-22A.

 

  1. Details of Company Secretary: Section 230 of the Companies Act, 2013 allows a time period of 6 months to fill up casual vacancy of any whole-time KMP. However, to file ACTIVE form, applicable companies compulsorily need to have a Company Secretary as on the date of filing irrespective of the time period allowed under the Act.

 

Conclusion

ACTIVE form is mainly introduced with the intent to bar scam companies not having proper registered office and companies lagging behind with annual compliances from undertaking major activities. However, the practical difficulties that has come with it is somehow hindering the compliance process. Considering the above issues, there is a requirement for updating the said e-form.

 


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