New E-Form Active Notified to Curb Shell Companies

As part of its efforts to curb shell companies, the Ministry of Corporate Affairs has notified a new electronic form ACTIVE (Active Company Tagging Identities and Verification) (‘Form INC-22A’) through Rule 25A of the Companies (Incorporation) Rules, 2014.[1] According to Rule 25A, every company incorporated on or before December 31, 2017 (subject to a few exceptions, such as companies which are in the process of being struck off) is required to file particulars of the company and its registered office in the prescribed form (Form INC-22A) on or before April 25, 2019. Form INC-22A, inter alia, requires companies to furnish details of the registered office, including the photo of the registered office showing at least one director/ key managerial personnel who has affixed his Digital Signature to Form INC-22A, geographical coordinates of the registered office and details of the company’s auditor and key managerial personnel. Form INC-22A also requires a list of all directors of the company to be provided. If any such director of the company does not have an ‘Active’ DIN status, such company will not be able to file Form INC-22A. Further, any company which has not filed its financial statements and / or annual returns is also restricted from filing Form INC-22A, unless such company is under management dispute and the Registrar of Companies has recorded the same.

A company may file this form after the lapse of the prescribed period upon payment of a late fee of INR 10,000 (approx. USD 140), and non-filing of the same gives the Registrar of Companies a right to cause a physical verification of the registered office. If the registered office is (upon such verification) found to be incapable of receiving and acknowledging all communications and notices addressed to it, then in addition to the imposition of a penalty not exceeding INR 1 lakh (approx. USD 1400) on the company and officers in default, the Registrar of Companies may take action for the removal of the company’s name from the register of companies. Additionally, unless Form INC-22A is filed, a company will not be able make filings in relation to change in its authorised capital or paid-up capital, changes in directors (except cessation), change in the registered office and / or filings in relation to any amalgamation or demerger.

[1] With effect from February 25, 2019; inserted by the Companies (Incorporation) Amendment Rules, 2019 dated February 21, 2019.