DIN

Director of ACTIVE Non-Compliant Company: An Overview

calendar25 Apr, 2023
timeReading Time: 4 Minutes
Director of ACTIVE Non-Compliant Company: An Overview

Form INC-22A ACTIVE was established by the Ministry of Corporate Affairs[1] (MCA) in the Companies (Incorporation) Amendment Rules, 2019 and the Companies (Incorporation) (Fourth Amendment) Rules, 2019. Requiring companies to submit information on their registered office and company details. The status of any firm will be listed as “ACTIVE non-compliant” if it fails to submit the required paperwork by the deadline. In addition to the change as mentioned above, the MCA added a new Rule 12B to the Companies (Appointment and Qualification of Directors) Rules, 2014. As a result, such “Active Non-Compliant” firms’ Director Identification Numbers (DINs) will now be identified as “Director of ACTIVE Non-Compliant Company.”

The author has attempted to describe the process of filling out form INC-22A ACTIVE in this post, along with all the pertinent facts that could aid in your comprehension of the idea.

Status of the Director of an ACTIVE Non-Compliant Company

The author will discuss the situation of a director of an Active non-compliant company in this part. The Ministry of Corporate Affairs changed the Companies (Appointment and Qualification of Directors) Rules, 2014, and Rule 12B was added as a result. Due to this modification, all Active Non-Compliant” companies Director Identification Numbers (DINs) will also be identified as “Director of ACTIVE Non-Compliant Company.” Therefore, in accordance with the wording of the new legislation, directors of firms still need to fill out the form.

The Directors of firms that have not filed an ACTIVE e-Form for any of the companies will thus be labelled as Directors of ACTIVE Non-Compliant Company under the new laws. Only after paying all past-due MCA yearly returns will they be able to alter the marking to Director of an ACTIVE complying firm. Therefore, all Directors must ensure compliance for all the firms they are engaged in – or risk facing severe fines in the future. According to the discussion above, all firms registered on or before December 31, 2017, must submit an Active E-form.

Exempted Companies filling E-form ACTIVE

As the characteristics of an ACTIVE Non-Compliant Company and form INC-22A have previously been discussed, let’s look at the businesses that are excluded from completing this form. The list of these businesses is as follows:

  1. Organisations that have been dissolved
  2. Companies that are being struck out
  3. A company that is under liquidation
  4. Companies that merge or are dissolved

Recent Notification

A recent notification alerting specific companies to comply with active status was released by the Ministry of Corporate Affairs (MCA).

Every Company formed on or before December 31, 2017, must submit e-Form ACTIVE (Active Company Tagging Identities and Verification) or INC 22A, in accordance with the revised Rules.

What Are the Effects of Complying E Form Active

Companies who successfully file the e-form INC 22A are now referred to as “Active Compliant” companies, while those that were unable to do so are known as “Active Non-Compliant” companies.

Restrictions on Filing Active E-Form for Non-Compliant Company

Any business that hasn’t submitted the necessary paperwork will be limited in its ability to submit an Active E-form, unless the firm is involved in a management conflict and the registrar has noted this on the register.

  1. Financial statements required by Section 137;
  2. an annual report required by Section 92;
  3. Or both (i) and (ii).

What Will Happen If The Company Does Not File E-Form INC-22A?

  • The Company will have ‘ACTIVE-non-compliant’ stamped against it.
  • The late submission of INC-22A will result in a fine of INR 10,000.00.
  • The following forms cannot be filed by such a company, which will be designated as “ACTIVE non-compliant”:
    • Change in Authorised Capital, SH-07
    • Change in Paid-Up Capital, PAS-03
    • DIR-12 (Director Changes Other Than Termination)
    • Change of Registered Office Form INC-22
    • (Amalgamation, de-merger) INC-28
    • The firm must submit an e-form ACTIVE together with the required cost in order to be designated as “ACTIVE Compliant.”
  • The Registrar will conclude that there is no basis to think the company is conducting any business or activity.
  • In accordance with any applicable regulations, the Registrar may cause a physical verification of the company’s registered office.
  • The Registrar has the authority to remove a company’s name from the register of companies without taking any further action.
  • In addition, the firm and any official who is in default are subject to a fine that might totalINR One lakh.

Application for Closure of ACTIVE Non-compliant Company

The status of the business is ACTIVE. If the following conditions are met, a non-compliant corporation may apply in the required format for the company to be dissolved:

  • Businesses that failed to launch within a year after their incorporation.
  • Companies that have been incorporated but whose subscribers to the memorandum have not paid the subscription money within a period of 180 days.
  • Organisations that have not conducted any operations or business for the two fiscal years before.
  • Each director must have submitted their DIN KYC and updated their authorised status on the DIN.
  • According to Section 164(2) of the Companies Act, none of the company’s directors should be disqualified. There has to be at least one Director with an approved DIN.

Conclusion

Every business that was formed on or before December 31, 2017, was obliged to submit an electronic form called e-Form ACTIVE (Active Company Tagging Identities and Verification) to confirm the address of its registered office. Any organisations whose INC-22A was not filed on or before the specified date have had their status changed to “ACTIVE Non-compliant.”  Additionally, all directors of these “ACTIVE non-compliant” corporations have the designation “Director of ACTIVE non-compliant company” on their Director Identification Numbers (DIN).

Read Our Article: A Complete Overview Of E-Form INC 22A

Request a Call Back

Are you human? : 4 + 8 =

Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality