MCA amends Rule 25A to remove the Company Deadlock faced by the Companies

The Ministry of Corporate Affairs (MCA) has amended rules to allow such companies to make a filing about their directors and become compliant.

The MCA has amended what is called the Rule 25A related to the Active Company Tagging Identities and Verification (ACTIVE). A non-compliant company can now file Form DIR-12 to update details on its directors.

The change will allow a non-compliant company to file a form in case of appointment of new directors, or disqualification or deactivated.

Principle Rule

(1) Every company incorporated on or before the 31st December 2017 shall file the particulars of the company and its registered office, in e-Form ACTIVE (Active Company Tagging Identities and Verification) on or before 25.04.2019.

Provided also that no request for recording the following event-based information or changes shall be accepted by the Registrar from such companies marked as “ACTIVE-non-compliant”, unless ” e-Form ACTIVE” is filed

Amended Rule

Rule 25A (1) mandates the FILING e- FORM Active containing the particulars of the company. Companies defaulting in the filing of the Form shall be marked “Active Non-Compliant”. In such circumstances, no request for recording event-based information or changes as listed in the fourth proviso to the Rule shall be accepted by the Registrar unless “ e-Form ACTIVE” is filed.

This amendment seeks to substitute item (iii) – in the list of event-based disclosures which will not be accepted for failure to file eForm ACTIVE as under:

DIR-12 (changes in Director except in case of: 

1. cessation of any director or 

2. Appointment of directors in such company where the total number of directors is less than the minimum number (i.e. 2 in case of the private company and 3 in case of a public company) in on account of disqualification of all or any of the director under section 164.

3. Appointment of any director in such company where DINs of all or any it’s the director(s) has been deactivated. 

4. Appointment of the director(s) for implementation of the order passed by the Court or NCLT or NCLAT under the provisions of the Act or under the Insolvency and Bankruptcy Code, 2016).

This brings much-needed relief to companies which were marked ACTIVE non-compliant due to non-filing of e-form ACTIVE, owing to deactivation of the DINs of directors. The deadlock could now be removed by filing details of the new director’s appointment,

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