The Ministry of Corporate Affairs (the MCA) vide the Companies (Incorporation) Amendment Rules, 2019 read with the Companies (Incorporation) (Fourth Amendment) Rules, 2019 had introduced Form INC-22A ACTIVE mandating the Companies to file particulars of the Company and its registered office on or before 15 June 2019. If any company fails to file the said form within the due date, the status of the Company will be marked as “ACTIVE non-compliant”.
In addition to the above amendment, the MCA has amended the Companies (Appointment and Qualification of Directors) Rules, 2014 by inserting new rule 12B. Consequent to this amendment now the status of Director Identification Number (DIN) of those “Active non-compliant” companies will also be marked as “Director of ACTIVE non-compliant company”. The DIN status can be changed to “Director of ACTIVE compliant company”, only after filing of form INC-22A ACTIVE.
Consequences of non-filing of Form INC -22A ACTIVEon or before 15 June 2019:
(i) Penalty of INR 10,000 shall have to be paid.
(ii) DIN of the Directors shall be marked as “Director of ACTIVE non-compliant company”
(iii) The Companies are unable to file the following forms with the MCA, unless Form INC-22A ACTIVE is filed:
Form SH-07 (Change in Authorized Capital);
Form PAS-03 (Change in Paid-up Capital);
Form DIR-12 (Changes in Director except cessation);
The Ministry of Corporate Affairs (the MCA) on 2 November 2018, has notified the Companies (Amendment) Ordinance, 2018 (Ordinance) in order to amend provisions under the Companies Act of 2013. The following are the major changes brought about by the ordinance.
The Company incorporated after commencement of this Ordinance and having share capital shall not start business or borrow unless:
i. The Director shall file declaration, within 180 days from date of incorporation of the Company with the Registrar that every subscriber to the company to the memorandum has paid the value of shares agreed to be taken by him.
ii. The Company has filed verification of its registered office with the Registrar.
· Any default with the above provisions will make the company liable for penalty to the tune of INR 50,000/- and every officer in default will be punishable for Rs. 1000/day up to maximum of INR 1,00,000/-.
· Failure to file the declaration gives reasonable cause to the Registrar that the company is not carrying out is business and he can initiate action for removal of the name of company from register of companies.
Sub-section 9 to Section 12
Now empowers the Registrar to initiate action for removing the name of company from the register of companies, when it is found, on physical verification of registered office caused by the Registrar, that the company does not have a registered office capable of receiving and acknowledging all communications and notices on behalf of the Company.
sub-section (2) to Section 86
Penalizes anyone who wilfully supplies false or incorrect information or knowingly suppresses any material fact required to be register under Section 77 (Duty to register charges), and such person shall be liable for action under Section 447(Punishment for fraud).
Changes to provisions of Fines / Penalties / Adjudicating authority
Substitution of sub-section 5 of Section 92
The amended provision provides that if any company fails to file its annual return under sub-section (4), before the expiry of the period specified therein, such company and its every officer who is in default shall be liable to a penalty of INR 50,000/- and in case of continuing failure, with further penalty of one hundred rupees for each day during which such failure continues, subject to a maximum of INR 5,00,000/-
Substitution of Section 117(2)
In case of failure of a Company to file resolution with the time period (i.e. 300 days from the date of event), the Company shall be liable to a penalty of INR 1,00,000/- and in case of continuing failure, INR 500/- per day up to INR 25,00,000/- maximum, with the Officer in default (including the liquidator of the company) being penalized for INR 50,000/- and in case of continuing failure, INR 500/day up to INR 5,00,000/-. Subject to the maximum prescribed, the penalty for continued failure of INR 500/- per day has been introduced.
Substitution of sub-section 3 of Section 137
The old provision provided that if a Company fails to file financial statements with the Registrar it shall be punishable with fine from INR 1,00,000/- to INR 5,00,000/-. Such offence has firstly been made a penal provision and secondly, new penalty of INR 1,00,000/-and in case of continuing failure, with further penalty of INR 100/- for each day after the first during which such failure continues, subject to a maximum of INR 5,00,000/- has been inserted. The provision for imprisonment has been done away with.
Sub-Section 2 of Section 157
If the company fails to furnish the Director identification Number, it shall be liable to penalty of INR 100/- per day for each day after the first during which such failure continues, subject to a maximum of INR 1,00,000/-, and every officer of the company who is in default shall be liable to a penalty of not less than INR 25,000/- and in case of continuing failure, with further penalty of INR 100/- for each day after the first during which such failure continues, subject to a maximum of INR 1,00,000/-. Provisions for imposition of daily penalties of INR 100/- have been introduced.
sub-section (1) under Section 164
The new ground of disqualification of director: the amended provision provides that if a director does not comply with the number of directorships under Section 165(1) that is, maximum ten public companies and maximum twenty in other companies he/she shall suffer disqualification in accordance with section 164 of the Act.
Compounding of Offences:
· Firstly, the pecuniary jurisdiction of Regional Director for compounding of offence under section 441(1)(b) has been enhanced from INR 5,00,000/- to INR 25,00,000/- and
· Secondly, it has clarified that offences which are punishable with imprisonment only or with imprisonment and fine shall not be compounded.
The Amendment has provided lesser penalties for one-person companies or small companiesi.e. penalty which shall not be more than one half of the penalty specified for non-filing of annual return u/s 92(5), non-filing of resolutions u/s 117(2), and subsection 3 of Section 137 for filing of financial statements of foreign subsidiaries.