The move is aimed at breaking a deadlock as companies which haven't furnished prescribed information of their directors and other KYC details have virtually been barred from updating their registration and accounting details with the Registrar of Companies.
The Ministry of Corporate Affairs (MCA) has given a window for non-compliant companies to update their KYC details, including that of directors, so that they can file financial and other information under the Companies Act without attracting penal action by various authorities including the taxman.
The move is aimed at breaking a deadlock as companies which haven’t furnished prescribed information of their directors and other KYC details have virtually been barred from updating their registration and accounting details with the Registrar of Companies.
In February this year, the MCA issued Companies (Incorporation) Amendment Rules, 2019 and Companies (Registration offices and Fees) Amendment Rules, 2019 under which a company incorporated on or before December 31, 2017 has to file its particulars and that of its registered office, in the e-form ACTIVE.
Through the e-form INC-22A, or ACTIVE (Active Company Tagging Identities and Verification), the government wants to ensure that companies accurately file their details so that a proper check is maintained, and that creation of shell companies is tracked. The form records address of the registered office along with a photo, latitude and longitude of the place where the office is located, and enables geo-tagging.
Firms which had not filed the ACTIVE form were marked ‘ACTIVE non-compliant’ and are liable for action as per the Companies Act. Till the time a firm failed to file the form, the MCA did not record any changes relating to the company like changes in director, etc. Also, some firms were not in a position to file form INC-22A as the DIN of director was de-activated due to various reasons. Besides, some companies faced issues like non-compliance in annual filing and non-appointment of company secretary, which led to their non-filing. All these companies can now update the details, a senior official said.
Director of Nangia Andersen Sandeep Jhunjhunwala said the MCA has now amended Rule 25A related to the ACTIVE form pursuant to which a non-compliant company can file Form DIR-12 to update details on its directors. “This brings much needed relief to companies which were marked ACTIVE non-complaint, due to non-filing of e-form ACTIVE, owing to de-activation of the DINs of directors resulting from Section 164 disqualifications, etc. The deadlock could now be removed by filing details of new director’s appointment in form DIR-12 and then complying with ACTIVE form filing and other related compliances under the Companies Act.”
Rajat Mohan, partner at AMRG & Associates, too welcomed the development. He said, “The amendment will enable a non-compliant company to file DIR-12 in case of appointment of directors resulting from minimum count requirement under Section 149, disqualification under Section 164 or situations where DINs of directors have been de-activated.”