E-ACTIVE drive - An attendance call for Companies by MCA
Jyoti Jain (Chartered Accountant)
It has been observed that at many instances, Companies are registered under the Companies Act but are not performing any business activities and exist only on papers. Such Companies are often termed as ‘Shell Companies’. At times, Shell Companies also tend to be conduits for illicit funds. Last year, authorities had struck-off names of lakhs of Companies from the official records for not carrying out business activities for long and allegedly being used for tax evasion and money laundering, while lakhs of directors had also been disqualified.
Continuing with the move to crack down Shell Companies and clean Corporate India, MCA has announced an attendance call i.e. E-ACTIVE (Active Company Tagging Identities and Verification) drive where Companies incorporated on or before 31st December, 2017 are required to file Form E- ACTIVE (INC-22A) on or before April 25, 2019 vide new rule 25A inserted via Companies (Incorporation) Amendment Rules, 2019. Similar drive for directors for submitting their KYC through form DIR-3KYC with latest documents was also initiated and completed by MCA last year.
The Companies (Incorporation) Amendment Rules, 2019 shall come into effect on February 25, 2019. The new rule also seek to update the federal government’s database of Company and its registered offices.
1. Applicability
The E-ACTIVE Form (INC 22A) is applicable to every Company incorporated on or before December 31, 2017. However, Companies whose financial statements or annual return or both are not furnished with the Registrar will not be able to file ACTIVE form unless such Company is under management dispute and the Registrar has recorded the same on the register.
Since this attendance call is for active Companies, Companies which are under the process of striking off, Companies under liquidation, amalgamated Companies or dissolved Companies and struck off Companies are not required to file this E-ACTIVE Form (INC 22A).
2. Requisite Information for completing attendance call
(a) Details of Company - Name of the Company, Address of Registered Office (RO) of Company with longitude and latitude of RO of Company (along with a Photo of Registered Office showing therein at least one Director/KMP who affixed E-Active Form), Email id of Company.
(b) Details of directors - Number of directors in Company, List of names of directors with DIN Numbers.
(c) Details of Statutory Auditors - Name of Auditor or Auditor’s Firm, Membership No of Auditor or Firm’s Registration No., PAN of of Auditor or Firm’s Registration No, Tenure of Statutory Auditor
(d) Details of Cost Auditor - Name of Cost Auditor or Cost Auditor’s Firm, Membership No of Cost Auditor or Firm’s Registration No., Tenure of Cost Auditor
(e) Details of Key Managerial Personnel - DIN/PAN, Name, Designation and Membership No.(In case of Company Secretary) of Managing Director, Whole time Director, Manager, Chief Executive Officer (CEO), Chief Financial Officer (CFO), Company Secretary
(f) Details of Forms filed for FY 17-18 - SRN of AOC-4 /AOC-4 XBRL and MGT-7 filed for FY 17-18
3. Verification and Certification
After duly verifying the E-ACTIVE form (INC-22A), a Director in case of One Person Company (OPC) and one Director and one Key Managerial Personnel or two Directors in case of other Companies will digitally sign the form.
Thereafter, E-Active Form (INC-22A) will be certified by practicing Chartered Accountant, Cost Accountant or a Company Secretary.
4.Consequences of not furnishing E-ACTIVE Form
If a Company fails to file this e-ACTIVE form on or before April 25, 2019, the Company shall be marked as “ACTIVE- non-compliant” and the following e-forms shall also not be accepted by the Registrar –
(i) SH-07 | Change in Authorized Capital |
(ii) PAS-03 | Change in Paid-Up Capital |
(iii) DIR-12 | Changes in Director except cessation |
(iv) INC-22 | Change in Registered Office |
(v) INC-28 | Amalgamation, demerger |
On being marked as \"ACTlVE-non-compliant\" on or after April 26 , 2019, the Company shall be liable for action for removal of name of Company under section 12(9) of the Companies Act, 2013. Note that Section 12(9) allows a Registrar to remove the name of Company from Register of Companies on finding the Company in default with regard to requirements of registration of registered office upon physical verification of the registered office of the Company.
However, where a Company files \"E-ACTIVE\", on or after April 25, 2O19, the Company shall be marked as \"ACTIVE Compliant\", on payment of fee of ten thousand rupees.
Wrap Up
The rationale behind the introduction of this attendance call in a way of E-ACTIVE Form is an improvement of transparency and reducing cases of bogus/Shell Companies. Through this stringent action, all registered Companies on or before December 31 will have to e-file all their details so that a proper check is maintained on their operations and necessary action can be taken if required.