Company’s Registered Office is ACTIVE? File INC-22A by 25th April 2019

Ministry of Corporate Affairs has introduced a new concept of ACTIVE (Active Company Tagging Identities and Verifications). Ministry of Corporate Affairs notified the concept on 21 February 2019. ACTIVE has been introduced in Companies (Incorporation) Amendment Rules, 2019 which shall be effective from 25 February 2019.

Forming a new Rule 25A, ACTIVE says, “Every company incorporated on or before the 31st December 2017 shall file the particulars of the company and its registered office, in e-Form ACTIVE (Active Company Tagging Identities and Verification) on or before 25. O4.2O19.”

Why ACTIVE Tag?

The rule was introduced based on the analysis that the companies failed to maintain the registered office of the Company as per the S12 of Companies Act, 2013. The problem aroused when the government could not trace the registered office during the visit of officials for verification. In order to curve down this issue, the Ministry of Corporate Affairs introduced ACTIVE in which the directors have to keep the tag ACTIVE of the registered office.

The ACTIVE rule further says that the director of the Company shall declare and certify in form INC – 22A about the identity of the registered office. This would include the photograph of registered office showing external building and internal office showing at least one director or KMP who has affixed the digital signature in the form.

The ACTIVE rule was taken into consideration with an increasing number of scams taking place. This rule will eradicate the issues that have been a major factor of scam businesses. This rule also states that if the company has not filed its financial statements or due annual returns then it will be restricted from filing ACTIVE. Though, the companies in management dispute are spared from this restriction.

What if you do not File for ACTIVE?

There are consequences in case a Company doesn’t file for ACTIVE – INC 22A, they are:

1. Non-Filing can result in Registrar of Companies to undergo a physical inspection of the registered office. The ROA has holds all due power to strike off the Company name from the Registrar.
2. The Company will suffer a loss of not able to file major e-forms such as SH-7, PAS-03, DIR-12, INC-22, and INC-28.
3. There is a late filling penalty of Rs. 10,000 after 25.04.2019.

ACTIVE can help the businesses to be organic with the registered address. The ACTIVE rule can be proved as one of the most awaited inclusion.  As it also focuses on the business that has not filed its returns, this can be a game changer.