The Ministry of Corporate Affairs (MCA) has reaffirmed its commitment to maintaining company compliance, with the announcement that it will not extend the final date for filing the e-form ACTIVE (Active Company Tagging Identities and Verification). Primarily developed to tackle the issue of shell companies, this form must be filed before the deadline. Failure to do so, can lead to significant consequences for the company and its leadership.
The Consequences of Non-compliance
Companies failing to comply with the requirement to file the ACTIVE form will be marked as ‘ACTIVE Non-Compliant’. This status doesn’t just impact the company, it also affects the board. Directors of non-compliant companies suffer the ignominy of being branded as ‘Director of ACTIVE non-compliant company’.
Implications are severe as it becomes incumbent upon these directors to set the compliance record straight. If they fail in their attempts, they could be deemed ineligible for association with compliant companies. This is due to the serious risk associated they pose.
Potential Actions Against Defaulting Companies
Inaction or failure to address compliance issues isn’t an option. The defaulting company may face action that could result in the removal of its name by the registrar of companies. Furthermore, the company may be barred from filing several forms, severely affecting its administrative capabilities.
| Consequence | Explanation |
|---|---|
| Status Marked as Non-Compliant | If e-form ACTIVE is not filed, the company’s status gets marked as non-compliant. |
| Restrictions on Directors | Directors of non-compliant companies may be deemed ineligible for association with compliant companies. |
| Potential Actions | The company may face actions that can result in its name being removed by the registrar. |
| Limitations | The non-compliant company may be restricted from filing several forms. |
| Late Filing Fee | A fee of Rs. 10,000 will be imposed for late filing of the form. |
The Penalties for Late Filing
Adding insult to injury, companies that do not file their ACTIVE form on time will also suffer financial penalties. A late filing fee of Rs 10,000 will be imposed on defaulting companies. This serves as a deterrent and reinforces the importance the MCA places on timely compliance with all regulatory requirements. It also underlines the ministry’s commitment to weeding out shell companies and promoting transparent business practices.