Director of ACTIVE Non-Compliant Company

Recently, the Companies (Appointment and Qualification of Directors) Rules, 2014 were notified by the Ministry of Corporate Affairs. Directors of firms that have not filed an ACTIVE eForm will be labeled as “Directors of ACTIVE non-compliant company” in accordance with the new regulations. Let us look into the regulations involving Director of ACTIVE Non-Compliant Company.

Section 12B of the Companies (Designation and Eligibility of Directors) Regulations, 2014

1. The Director Identification Number (DIN) of current directors of a company controlled by Rule 25A of the Companies (Incorporation) Rules, 2014, will be identified as “Director of ACTIVE non-compliant company” if the company neglects to file the electronic form ACTIVE within the allotted time.

2. The directors of the failing firm will take all required actions to guarantee that the relevant company files the e-form ACTIVE in a timely manner.

3. After the defaulting firm files the e-form ACTIVE, the DIN of the current directors will be identified as ‘Director of ACTIVE compliant company.’

Effects of Not Submitting an Active e-Form

1. The label “ACTIVE-non-compliant” will be applied to the company.
2. There will be a 10,000.00 rupee fine for filing INC-22A after the deadline.
3. The Registrar will not accept requests to record any of the following event-based information or to make any changes:
4. Changes in Authorised Capital (SH-07); Paid-Up Capital (PAS-03); Director Changes (DIR-12), Registered Office Changes (INC-22); and Amalgamation and De-Merger (INC-28)
5. The Registrar will conclude that there is good grounds to think the company isn’t operating or doing any business.
6. In accordance with any required procedures, the Registrar may physically verify the company’s registered office.
7. The Registrar may, without taking any further action, request that the company’s name be removed from the register of companies.
8. Additionally, the corporation and each official who violates the terms of the agreement will be subject to a penalty that might reach one lakh rupees.

Request for Closure of Active Non-compliant Company

The company is currently active. A non-compliant corporation may apply in the required format to have its business dissolved if the following requirements are satisfied:

1. Companies that did not begin operations within a year of being incorporated.
2. Incorporated businesses whose memorandum subscribers have yet to pay the subscription fee in the allotted 180 days.
3. Organizations that didn’t operate or transact business during the previous two fiscal years.
4. Every director needs to update their authorized status on the DIN and file their DIN KYC.
5. Section 164(2) of the Companies Act states that no director of the company shall be removed from office. A minimum of one Director with DIN approval is required.

Conclusion: Director of ACTIVE Non-Compliant Company.

Directors of firms that have not filed an ACTIVE eForm for any of the companies will be identified under the new standards as Directors of ACTIVE Non-Compliant Company. They can only modify it to Director of an Active Complying company once the marking has been made and all past-due MCA yearly returns have been filed.

Therefore, all directors must make sure they are staying in compliance with all the firms they work with, or else they risk facing harsh penalties down the road.