One-Time 'Active' filing - crackdown on Shelf Companies continues…
On 21 February 2019, the Ministry of Corporate Affairs (MCA) notified changes to the Companies (Incorporation) Rules, 2014 introducing a one-time form filing requirement confirming the active status of companies. The form needs to be filed on or before 25 April 2019.
The amendment has not yet been notified in the official gazette of India, but is expected to come into force on 25 February 2019.
A closer review of the e-form ACTIVE reveals that numerous details such as (i) number and list of directors, (ii) information about statutory auditors and cost auditors, where applicable, (iii) details of chief executive officer, company secretary and chief financial officer, (iv) details of annual financials and annual return filed for FY 2017-18, (v) photograph of registered office showing external building and inside office, along with one director / key managerial personnel who has digitally signed the e-form ACTIVE are required to be provided. Further, practicing professional’s certification also appears to be mandatory on e-form ACTIVE.
The details required to be provided in e-form ACTIVE are comprehensive and companies which are non-operating, or which are not fully compliant with the requirements of the Companies Act, 2013, will find it difficult to furnish the details required in e-form ACTIVE. Further, the consequences of being ‘ACTIVE non-compliant’ are severe. The extent of ROC’s oversight in view of the information shared in e-form ACTIVE remains to be seen.
As an immediate next step, all companies incorporated on or before 31 December 2017 should (i) complete their pending compliances (including filing of their financial statements and / or annual returns for FY 2017-18) at the earliest; and (ii) file e-form ACTIVE on or before 25 April 2019.
- Parag Bhide (Principal Associate) and Aakash Dasgupta (Senior Associate)
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