ANATOMIZATION OF "RULE 25A" AND "e-FORM ACTIVE"

[SHIVANSH MEHRA]

1.  This move by the Government of Indi is an integrated part of the colossal drive against shell companies to eradicate the use of companies in generation and accumulation of black wealth. This will also promote good corporate governance and companies will be cognizant of the legal compliances. It will also embark on a new and innovative information/data repository which will aid the stakeholders to avail accurate information about the company and its constituents.
2. The Companies (Incorporation) Amendment Rules, 2019 enforcing a new 'e-Form ACTIVE (Form INC- 22A)' along with insertion of a new Rule 25A came in force from 25th February 2019. Another amendment by way of Companies (Registration Offices and Fees) Amendment Rules, 2019 also came in force from 25th February 2019 which specifies the late fee payable for delay in filing Form INC- 22A [discussed below].
3. As the name suggests 'ACTIVE COMPANY TAGGING IDENTITIES AND VERIFICATION (ACTIVE)', companies are required to file particulars which will not only help surface sham and shell companies eventually but also identify accurate addresses/places where such companies are registered and extant of their operations.    

Now, analysis of newly inserted Rule 25A- ACTIVE COMPANY TAGGING IDENTITIES AND VERIFICATION (ACTIVE) is as follows:

1. Every company incorporated on or before 31-December-2017 shall file details of the company, directors, auditors, registered office, etc. (discussed later) in e-FORM ACTIVE (INC-22A).

2. This form is required to be filed by every company incorporated on or before 31-December-2017. 'Company' as defined in Section 2(20) of Companies Act 2013 can be public, private, government, One Person Company, Section 8 Company, Nidhi Company, or any other company whether incorporated under Companies Act 2013 or any other previous law in this regard.

3. There are a few exceptions inserted by proviso to Rule 25A wherein companies are restricted from filling Form INC- 22A. Such are as follows:

(a) Companies who have defaulted in filing their financial statements [Form AOC-4] or annual returns [Form MGT- 7] or both, which became due up till the date of the filing of the said form.

But, such defaulting companies can file Form INC- 22A if they are under management dispute and the same has been recorded by the registrar of companies.

(b) Also, companies which have been struck off, or under process of striking off or under liquidation or amalgamated or dissolved are not required to file such form. My view is that a company 'undergoing' dissolution or 'under' amalgamation is still required to file such e-Form if such process has not attained finality.

(c) Companies where DIN status of the director is not 'Approved' will not be able to file the form. So such companies need to ensure that DIN of all the active directors is 'Approved' before filing he form. For this criterion, it should make sure that annual Form DIR- 3 KYC is filed by the directors holding a valid DIN.

4. Where a company did not furnish/intimate the prescribed particulars or furnished particulars disregarding any clause of Form INC- 22A file the form, then even if such form is filed within due date, it might still be marked as "ACTIVE NON-COMPLIANT".

5. Consequences of the mark "Active Non-Compliant" shall be that the following events or changes might not be accepted or taken on record by the registrar-

                     (a) Form SH-07: For Change in Authorized Capital;

                     (b) Form PAS-03: For Change in Paid-up Capital;

                     (c) DIR- 12: For Changes in Directorship except in the event of cessation of any director;

                    (d) Form INC-22: Change in Registered Office;

(e) Form INC-28: Amalgamation, de-merger.

In addition to above, actions prescribed under sub section (9) of section 12 might also be initiated and result in removal of name of the company from the records of registrar of companies. Also, penalties and fees relating to non filing of the above forms (a to e) will also get attracted.           

6. When a company which has been marked as "Active Non-Compliant" because of any of the reasons listed above and files the eForm ACTIVE on or after 26-April-2019 along with payment of fee of Ten Thousand rupees shall be marked as "ACTIVE COMPLIANT" & allowed to file the forms mentioned in clause v (a to e). 

CONCISE ANALYSIS OF FORM INC- 22A (e FORM ACTIVE) WITH REGARD TO ITS PRAGMATIC APPLICATION-

1. Filing CIN of the company will automatically Pre-fill the following:

1. Name of the Company
2. Address of the Registered office of the company but latitude and longitude coordinates of such office has to be filled manually (Google maps can be used)
3. Email of the company registered with ROC. Though there is an option to change the email. This is a very important aspect of the form as such email will be verified by OTP and the form will not be uploaded if email is not verified. Further, in future communication with companies by ROC or any other authority will be done through this email.
4. Details of Statutory auditors (based on Form ADT- 1 filed by the company)
5. Details of Managing Director, CEO, Manager, etc.
6. Details of CFO of the company
7. Details of Company Secretary of the company
8. Details (SRN) of Form AOC-4 and MGT-7 filed for F.Y. 2017-18
9. Number of directors and List of Directors on the date of filling

2. Most importantly, Photograph of Registered office of the company showing external building of the office (maybe a factory building) and photo of inside office with atleast one director or a Key managerial person (KMP) appearing therein who is affixing their digital signature to the form. It is advised that such photographs should be clicked using a 'GPS enabled camera app' which is easily available on the play store though there isno express requirement in law to use a gps camera app but one can never be too sure of what may happen in future.
3. In addition to above, the company should make sure that the registered office has a name board affixed on the external building as per the provisions of Companies Act 2013 and Companies Rules 2014. In addition to this, it is suggested to mention GSTIN, and other registration numbers as required by various laws.
4. Form INC- 22A has to be mandatorily digitally signed by two directors except in case of One Person Company (one director) or by one director and one KMP who also have to quote their DIN/PAN. It will all depend on the size and scale of the company.
5. Task of company and professionals is simplified where the company is genuine and fair in carrying business activities and is not violating laws the land. But still proper documentation should be held on record and readily available whenever enquired by any governmental agency. This will have a far reaching effect as one could possibly contemplate in present time.

Though Form INC- 22A is available on MCA portal, it still needs revision as there are a few problems and errors while filling this form. This has also been confirmed by the ministry of corporate affairs and has assured that the form will be updated soon. 

Please feel free to revert back in case of any query.

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CA SHIVANSH MEHRA

E-mail: [email protected]