India: Geo – Tagging Of Companies (Registered On Or Before 31/12/2017) Mandatory Before 25th April – MCA

Last Updated: 27 February 2019
Article by Shubham Borkar and Rohan Dalbehera

The Central Government has been vested power under Section 12 (9) and Section 469 (1 and 2) to make rules for carrying out in the provisions by a notification for any matter whatsoever under the Companies Act 2013 ( hereinafter referred to as " the Act". The Ministry of Corporate Affairs regulates Corporate Affairs in India and is also a protector of interests of Investors, stakeholders. It issues notifications to regulate affairs of the Company as and when required.

About the New Geo – Tagging Notification

The Government of India (Ministry of Corporate Affairs) vide its Notification dated 21st February, 2019 (effective from 25th February, 2019) amended the Companies (Incorporation) Rules, 2014 inserting a new provision as 25(A) which talks about ACTIVE (Active Company Tagging Identities and Verification). Under this new rule, every company incorporated on or before 31st December, 2017 has to mandatory file particulars of the company and its registered office on or before 25th April, 2019 under the e-form ACTIVE (INC-22A).

The said amendment is for "Geo – Tagging" of the Registered Office of every company, which intends to alert government officials wherever it detects too many companies registered in the same premise, This would help in cracking down of "Shell Companies".

Exceptions

There some exceptions to this rule also where they are not required to file, such as:

  1. Any company who has not filed any its due financial statements under Section 137 or due annual returns under Section 92 or both, the company can't file the e-form until and unless the company is under management dispute and the Registrar has the records of the same.
  2. The companies which are already been struck off or under the process of striking off or they are under liquidation or amalgamation or they are dissolved as per the records of the Registrar.

Any company ( not falling under these above exceptions) which doesn't intimate the said particulars by the 25th April 2019, will be marked as "ACTIVE non-compliant" and will be liable to be fined under section 12(9) of the Companies Act, 2013 and for filing after the sue date a fee of 10,000 rupees will be levied on the Company. The Company is also liable for a physical inspection of ROC, if required.

What is the Effect of Non-Compliance?

If a Company is "ACTIVE non-compliant" as per the records of the Registrar, then any request for recordings of the following event-based information or changes will not be accepted by the ROC:

  1. SH-07(Change in Authorised Capital)
  2. PAS-03(Change in Paid-up Capital)
  3. DIR-12(Changes in Director except cessation)
  4. INC-22(Change in Registered Office)
  5. INC-28(Amalgamation, de-merger)

Contents to be Filled up in the E-Form

A New Form INC 22A has been introduced for this very purpose , contents in the e-form ACTIVE ( FORM NO. INC-22A) are:

  1. a. Corporate Identification Number
    b. Name of the Company
    c. Address of the Office with photo having a digital signature of atleast one
    d. Director(s)/KMP and the Latitude and Longitude also needs to be provided
    e. E-mail id of the company
  2. a. Number of Directors
    b. List of Directors as on date of filing having approved DINs
  3. Details of the statutory auditors and their numbers and their details such as PAN number of auditor or the firm, its name, registration number and period of appointment
  4. Whether the company requires a Cost Auditor, if yes then the details needs to be given
  5. Details of the Managing Director or Chief Executive Officer or Manager or Whole-time Director
  6. Details of the Company Secretary
  7. Details of the Chief Financial Officer
  8. Details of forms AOC-4/AOC-4 XBRL and MGT-7 filed for FY 2017-18

In the end of the Form you need to give the attachments, declaration, verification and certification.

End Note

The above notification from the Central Government has been enacted to stop the different types of criminal and economical offences such as tax evading, money laundering. There are many shell companies created by the miscreants to do fraud and cheat the Government, Shell companies are those companies which used to exist only papers and record files and there was no existence of them in real.

By this notification every registered company have to mandatory give their Geo- tag location, so, the real existence of the companies can be confirmed. They will be no more only on records or on paper sheet but also their physical existence can be confirmed. This will also keep a check on far too many companies getting registered on the same premises. This will help Tax and Enforcement departments to trace the fraud companies and stop the criminal activities. Let's be hopeful, that the Geo Tagging Feature will bring a positive change in the business environment and will help in the growth of the Indian economy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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