Process of Change in Status of Company From Active Non Compliant to ACTIVE - Series 528
Process of Change in Status of Company
From Active Non
Compliant to
Active
It’s a
common question amongst many professionals, mentioned below with hypothetical
situation:
“If a company fails to file Active form, status of form changed
as Active Non Complaint.
·
Out of 3 Directors 2 has not filed their DIR-3 KYC.
·
Due to non filing of DIR-3 KYC their DIN are deactivated.
·
Due to deactivation of DIN, Company is not able to file Annual
Forms (AOC-4/ MGT-7)
·
If Company will not file Annual Forms it can’t file Active form
to change status of Company.
This situation us facing by many corporate and
professionals these days. These companies are “Active non compliant”. In this
editorial author trying to discuss the situation step wise step.
Process
of change in Status:
If
a Company fails to file Active form then Status shall be changed as “Active Non
Compliant” and company shall not be allowed to file following forms:
·
Sh-7 (Increase
in Authorized Capital)
·
PAS-3 (Allotment
of Shares)
·
DIR-12
(Appointment and Resignation of Director (Except
·
Cessation))
·
INC-22 (Change
in Registered Office)
·
INC-28 (For
purpose of Amalgamation or de-merger)
In simple
word it is very difficult situation for a company if its status changed as
“Active Non Compliant”. Now let’s discuss the same on the point view of
hypothetical situation mentioned above.
STEP-I
Out of 3 Directors 2 has not filed
their DIR-3 KYC and non co-operating in filing of KYC. Due to non filing of
DIR-3 KYC their DIN are deactivated. Now how to appoint new Director to file
pending annual forms with ROC, to update Annual Compliances?
As per Companies
(Incorporation) Eighth Amendment Rules, 2019 on 16th October, 2019,
MCA has amended rule 25A as given below:
Legal
Provision Company can’t file DIR-12 for change
in director, except situations mentioned below:
·
Cessation of Any Director
or
·
appointment of directors
in such company where the total number of directors are less than the minimum
number provided in clause (a) of sub-' section (1) of section 149 on account of
disqualification of all or any of the director under section 164.
·
Appointment
of any director in such company where DINs of all or any it’s director(s)
have been deactivated.
·
Appointment of director(s)
for implementation of the order passed by the Court or Tribunal or Appellate
Tribunal under the provisions of this Act or under the Insolvency and
Bankruptcy Code, 201.6).
One can opine that:
As per
amended rules MCA allowing filing e-form DIR-12 by the Company, where DIN of
directors deactivated due to non filing of DIR-3 KYC. Therefore, one can opine
that company can file DIR-12 for appointment of new Director where other
directors not updated their KYC.
Now question arise how to appoint new Director:
As
there are 3 directors in the company in given example. They can appoint new
director in meeting of board of Directors as Additional Director or call an EGM
for appointment of Director.
STEP-II
Due to deactivation of DIN, Company
is not able to file Annual Forms (AOC-4/ MGT-7)
After
completion of Step-I. Now there are four directors on the Board of Company. Out
of 4 directors DIN of 2 directors are de-activated. As DIN of 2 directors are
de-activated company can’t file annual Forms.
Therefore, now question arise regarding removal of
these two directors:
Company
has to follow the process of removal of Director u/s 169 of Companies Act, 2013
and after completion of process have to file DIR-12 for cessation of such
Directors. Company in ‘Active non compliant status’ still allowed to file
DIR-12 for cessation of Directors.
STEP
III
After
cessation of directors, now there are two directors on the board of Directors
and both having active DIN Status.
Company
shall proceed further for filing of AOC-4 and MGT-7 for all the pending financial
years. Once companies complete filing of Annual form, such company shall be
eligible for filing of ACTIVE form.
STEP
IV
Filing of ACTIVE form.
After
completion of annual filing company shall file ACTIVE form with additional
fees. Just after filing of Active form status of company shall be changed to
ACTIVE.
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES
Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
Disclaimer: The entire contents of this
document have been prepared on the basis of relevant provisions and as per the
information existing at the time of the preparation. Although care has been
taken to ensure the accuracy, completeness and reliability of the information
provided, I assume no responsibility therefore. Users of this information are
expected to refer to the relevant existing provisions of applicable Laws. The
user of the information agrees that the information is not a professional
advice and is subject to change without notice. I assume no responsibility for
the consequences of use of such information. IN NO EVENT SHALL I SHALL BE
LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM,
ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION
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