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Analysis of Form ACTIVE--Unearthing Inactive Companies

Pragya Lalwani

Form ACTIVE (INC-22A) has been released by the Government to track the companies using incorrect addresses for correspondence, those being formed to defraud the investors and the shell companies formed only on papers so as to strengthen the corporate governance. Learned author in this write up, pens down all aspects of 'e-Form ACTIVE' in an analytical way.

1. Introduction

Overture of e-Form ACTIVE (Active Company Tagging Identities and Verification) is a welcome move of Ministry of Corporate Affairs that paved the way for strengthening the corporate governance in India. Rule 25A is inserted under Companies (Incorporation) Rules, 2014 in this respect vide Companies (Incorporation) Amendment Rules, 2019, dt. 21-2-2019 notified by MCA, effective from 25-2-2019. According to which every company registered/incorporated on or before 31st December, 2017 has to file e-Form ACTIVE on or before 25thApril, 2019 furnishing particulars of such company and its registered office. The main purpose of introducing it, is to unearth the shell companies having bogus addresses and require companies in large numbers to comply with the rules and regulations notified by Ministry for transparent corporate structure.

2. Companies not required to file e-Form ACTIVE

As inferred from rule 25A(1), every company incorporated on or before 31-12-2017 is required to file the particulars of company and its registered office in e-Form ACTIVE thus, companies that are incorporated after 31-12-2017 are not required to file Form INC-22A i.e., ACTIVE.

Further, second proviso to rule 25A(1) stipulates certain companies that are not required to file Form INC-22A(ACTIVE). Accordingly, following companies which have been as such recorded in the register of companies shall not be required to file e-Form ACTIVE:

(i) companies being struck off or which are under process of striking off;

(ii) companies under liquidation;

(iii) companies being amalgamated; or

(iv) companies being dissolved.

Moreover, any company which has not filed its financial statements under section 137 or annual return under section 92 or both that are due for filing with the Registrar would be restricted from filing e-Form ACTIVE unless such company is under management dispute and the same has been recorded by