India has a total of 19.44 lakh companies registered with the RoC as on October 2019 and of this 11.56 lakh are active companies, while 7.11 lakh have been closed.

The ministry of corporate affairs (MCA) has amended the companies Act under which a non-compliant firm can now update details of its directors and other related information, thereby allowing it to meet compliance norms. The move is aimed at breaking the deadlock wherein non-compliant companies were not allowed to update their details.

In February this year, the MCA issued Companies (Incorporation) Amendment Rules, 2019 and Companies (Registration offices and Fees) Amendment Rules, 2019, under which every company incorporated on or before December 31, 2017, was required to file the company’s particulars and its registered office, in Form ACTIVE by June 15, 2019, a source said.

However, any company which had not filed its financial statements or annual returns or both with the Registrar of Companies (RoC) was restricted from filing the same. Since these firms were not allowed to file returns, they were not able to update details like change in authorised capital or paid-up capital or information regarding mergers, etc, the source added.

Through the E-Form INC-22A, or ACTIVE (Active Company Tagging Identities and Verification), the government wants to ensure that a proper check is maintained, and also, to ensure that shell companies can be tracked. The form records address of the registered office along with a photograph, latitude and longitude of the place where the office is situated and enables geo-tagging.

This law has been amended and now active non-compliant firms can file changes, including cessation of any director and appointment of directors where the total number of directors is less than the minimum number on account of disqualification.

AMRG & Associates chief executive Gaurav Mohan said, “Companies marked as active non-compliant were facing genuine hardship in cases of director disqualification, DIN deactivation due to non-filing of KYC documents, implementation of court orders under Companies Act and execution of court directions in cases of insolvency and bankruptcy. Law has been amended and such companies are now permitted to appoint directors to remove the deadlock.”

India has a total of 19.44 lakh companies registered with the RoC as on October 2019 and of this 11.56 lakh are active companies, while 7.11 lakh have been closed.