Active Company Tagging Identities and Verification compliance under the Companies Act, 2013 (e-Form ACTIVE)

The Ministry of Corporate Affairs, on the 21st of February, 2019 has came up with a relatively new concept called ACTIVE i.e Active Company Tagging Identities and Verification which verifies the company’s details and registered office in e-Form ACTIVE

Effective date of the notification: February 25, 2019

Applicability: The above provisions are applicable to all companies which have been incorporated under the act on or before December 31, 2017 except companies which were incorporated on or before December 31, 2017 but have been:
• Struck off by the Registrar or is under the process of striking off; or
• Under the process of Liquidation; or
• Has been amalgamated; or
• Dissolved

Due Date of filing e-Form:- on or before April 25, 2019

Pre-requisites for filing e-Form: Every company that is required to file the said e-Form ACTIVE, must ensure the following things before filing the form:
(1) Annual Filing forms i.e AOC-4 and MGT-7 for the financial year 17-18 is filed with the Registrar of Companies (Ensure both the forms are filed)

(2) Has the prescribed number of directors in the company i.e minimum 2 in private companies, minimum 3 in public companies and minimum 1 in OPC

(3) Each and every director of the company has duly filed their KYC forms with MCA and the status of their DIN is “Approved” and are neither “De-activated due to non-filing of DIR-3 KYC” nor “Disqualified u/s 164(2)”

(4) Has duly appointed an Auditor and the e-Form ADT-1 for their appointment has been filed with the Registrar of Companies

(5) Has duly appointment a Whole Time Company Secretary in the company, if applicable, and the e-form DIR-12 has been filed with the Registrar of Companies

(6) Has appointed Cost Auditor in the company, if applicable, and the e-Form CRA 2 has been filed with the Registrar of Companies

Consequences of non-filing of the e-Form: If the reporting company fails to file this e-Form with the Registrar of Companies on or before the due date:-
(1) Such companies will be marked as “ACTIVE-non-compliant”
(2) Such companies will not be allowed to file the following forms with the MCA
• SH-7 (Changes in Authorized Capital)
• PAS 3 (Changes in Paid Up Capital)
• DIR-12 (Changes in Director except for cessation)
• INC-22 (Changes in Registered office)
• INC-28 (Amalgamation, de-merger)

Filing Fees: Zero if filed on or before April 25, 2019

INR 10,000 if filed on or after April 26, 2019

Requirements for filing e-Form: Following documents/details are required for filing the form:
(1) Photograph of the external building of the registered office of the company showing name of the building (for eg. say the registered office of the company is situated in “Starlight” building, ensure the photo of the building shows the name “Starlight”)

(2) Photograph of outside of the registered office of the company (showing board of the company indicating its name, address, CIN, GSTIN, email id, telephone number and website, if any) (3) Photograph of inside of the registered office showing atleast one director whose DSC will be used in the form (for eg. If your company has 3 directors, Mr. X, Mr. Y and Mr. Z and DSC of Mr. X and Mr. Y is used in the form then the photo of inside office should mandatory include either Mr. X or Mr. Y)

(4) Email id of the company such as [email protected] or [email protected] or [email protected] or if it is gmail then [email protected] (this email id will be subject to #OTP verification and must be unique and shall belong to the company)

#Please note that the OTP can be generated only 10 times in one day and shall be valid for a span of 30 minutes each time

(5) DSC of any two directors of the company (including the Director whose photograph has been shared). Disqualified Directors will not be allowed to sign this form.

(6) Longitude and latitude of the company’s location.

The Companies (Significant Beneficial Owners) Amendment Rules, 2019-SBO Compliance

The Ministry of Corporate Affairs vide its notification dated February 8, 2019 has further amended the Significant Beneficial Owners (SBO) Rules and the new amended rules are now called as the Companies (Significant Beneficial Owners) Amendment Rules, 2019.

The intention behind the said rules is to identity the real owners behind the complex layers of investment made into the companies by individual or corporate entities.

Effective date of notification: February 8, 2019

Applicability: The said rules are applicable to all the companies incorporated under the Companies act.

Meaning of Significant beneficial owner (SBO): The following will be considered as the SBO of the reporting company-

1) Incase the member is a individual: In relation to a reporting company, SBO means an individual, who acting alone or together, or through one or more persons or trust, possesses one or more of the following rights or entitlements in such reporting company:
i. holds indirectly, or together with any direct holdings, not less than 10% of shares;
ii. holds indirectly, or together with any direct holdings, not less than 10% of voting rights in the shares;
iii. has right to receive or participate in not less than 10% of total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings alone

2) In case the member is a body corporate (whether registered in India or abroad) other than Limited Liability Partnership: The individual who:- a) holds majority stake in that member; or b) holds majority stake in the ultimate holding company (whether incorporated or registered in India or abroad) of that member.

3) In case the member is a Hindu Undivided Family (HUF)(through Karta):- the Karta of HUF.

4) In case the member is a partnership entity:- the individual who is:-
a) the Partner; or
b) holds majority stake in the body corporate which is partner of the partnership entity; or
c) holds majority stake in the ultimate holding company of the body corporate which is a partner of the partnership entity.

5) In case the member is:-
a) a pooled investment vehicle; or
b) an entity controlled by the pooled investment vehicle, based in member States of the Financial Action Task Force on Money laundering and the regulator of the securities market in such member state is a member of the International Organization of Securities Commissions, and the individual in relation to the pooled investment vehicle is:-
• is a general partner; or
• is an investment manager; or
• is a Chief Executive Officer where the investment manager of such pooled vehicle is a body corporate or a partnership entity

 

INDIRECT HOLDING to be considered in respect of individual member:- The rules put an emphasis on the word “indirect holding” therefore, an individual member who holds shares in his name, on behalf of another person, such individual member should not be considered as the SBO. The person on whose behalf the shares are held is considered the SBO.

“Direct holding” for the purpose of rule will mean any individual holding shares in the reporting company representing such right or entitlement in his/her own name; or the individual holds or acquires a beneficial interest in the share of the reporting company under sub-section (2) of section 89, and has made a declaration in this regard to the reporting company.

Meaning of majority holding with respect to indirect holdings of members that are corporate entity:- “Majority stake” means:-
i) holding more than one-half of the equity share capital in the body corporate; or
ii) holding more than one-half of the voting rights in the body corporate; or
iii) having the right to receive or participate in more than one-half of the distributable dividend or any other distribution by the body corporate

Duty of Reporting Company:- Every company shall take necessary steps to find out:-
1. In case of individual member:- If there is any individual member who will be considered as SBO, cause him to make a declaration of such beneficial ownership in Form BEN 1

2. In case the member is other than individual:- Shall identify such members who hold not less than 10% of its:-
a) Shares, or
b) Voting rights, or
c) Right to receive or participate in the dividend or any other distribution payable in a financial year, except to the extent the share of such reporting company is held by:-
• The authority constituted under sub-section (5) of section 125 of the Companies Act i.e IEPF authority;
• It’s holding reporting company (Provided the details of such holding reporting company shall be reported in Form No. BEN-2);
• The Central Government, State Government or any Local Authority;
• (i) a reporting company, or
(ii) a body corporate, or
(iii) an entity, controlled by the Central Government or by any State Government or Governments, or partly by the Central Government and partly by one or more State Government;
• Securities and Exchange Board of India registered Investment Vehicles such as mutual funds, alternative investment funds (AIF), Real Estate Investment Trusts (REITs), Infrastructure Investment Trust (InVITs) regulated by the Securities and Exchange Board of India,
• Investment Vehicles regulated by Reserve Bank of India or Insurance Regulatory and Development Authority of India, or Pension Fund Regulatory and Development Authority,

and give notice to such member, seeking information in accordance with sub-section 5 of section 90, in Form No. BEN-4

Duty of SBO: The significant beneficial owner must give a declaration in form BEN-1 to the reporting company within 90 days from the date of the notification i.e. February 8, 2019 for one time reporting and thereafter, if there is any change in significant beneficial ownership, such change must be reported in Form BEN-1 within 30 days from the date of the change

Compliance under the order: The reporting company upon receipt of declaration from significant beneficial owner will have to file a return with MCA in the e-Form BEN-2 within 30 days from the date of receipt of the declaration along with prescribed fees.

Remedies for the reporting company: If a person fails to give the information required by the notice given the reporting company in from BEN-4 within specified time or where the information given is not satisfactory, the reporting company in accordance with sub-section (7) of section 90 of the Companies Act, 2013, can make an application to the Tribunal for an order directing that the shares in question be subject to restrictions, including:-
• Restrictions on transfer of interest attached to shares in question;
• Suspension of the right to receive the dividend or any other distribution in relation to shares in question;
• Suspension of voting rights in relation to the shares in question;
• Any other restriction on all or any of the rights attached to the shares in question

Recent Amendment in the Companies (Acceptance of Deposits) Rules, 2014

The Ministry of Corporate Affairs, issued a notification on the January 22, 2019 amending the Companies (Acceptance of Deposits) Rules, 2014. These amended rules are called as the Companies (Acceptance of Deposits) Amendments Rules, 2019 and shall come into effect from January 22, 2019.

According to the amendment, every reporting company will have to file with the Registrar of Companies:

(1) A one-time return: Giving details of all the outstanding receipt of money or loan which is considered as Deposits as per the Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 for the period from April 1st, 2014 till the date of publication of the notification in the official gazette i.e. January 22, 2019 in e-Form DPT-3.

(2) Periodic return: Giving the details of particulars of transactions which are not considered as deposits as per Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 by 30th June of every year containing details as on March 31st in e-Form DPT-3.

Applicability: This amendment is applicable to all the companies irrespective of whether they are private or public except the Government Companies. Further since the Section 73(1) of the Companies Act, 2013 is not applicable to banking Companies and NBFCs, the said amendment will also not apply to them.

List of money or loan received by a company but not considered as deposits in terms of 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014:-

1 Any amount received from Central or State Government:–

(i)            the Central Government; or

(ii)           a State Government; or any amount received from any other source whose repayment is guaranteed by the Central Government or State Government; or

(iii)          any amount received from a local authority; or

(iv)           any amount received from statutory authority constituted under an Act of Parliament or a State Legislature

2 Any amount received from foreign Government/banks, etc –

(i)            Foreign Governments; or

(ii)            Foreign or international banks;

(iii)           Multilateral financial institutions;

(iv)          Foreign Governments owned development financial institutions;

(v)           Foreign export credit agencies;

(vi)          Foreign collaborators;

(vii)         Foreign body corporates;

(viii)        Foreign citizens;

(ix)          Foreign authorities or;

(x)           Persons residents outside India subject to the provisions of Foreign Exchange Management Act, 1999 (42 of 1999)

3 Any amount received as Loan from banking companies–

(i)            A loan or facility from any banking company; or

(ii)           From the state Bank of India or any of its subsidiary banks; or

(iii)          From a banking institution notified by the Central Government under section 51 of the Banking Regulation Act, 1949 (10 of 1949); or

(iv)          A corresponding new bank as defined in clause( d )of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980); or

(v)            From a cooperative bank as defined in clause (b-ii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934)

4 Any amount received as loan or financial assistance from PFIs –

(i)            Public Financial Institutions notified by the Central Government; or

(ii)           Any regional financial institutions; or

(iii)          Insurance companies; or

(iv)          Scheduled Banks as defined in the Reserve Bank of India Act,1934 (2 of 1934)

5 Amount raised through issuance of commercial paper:

Any amount received against issue of commercial paper or any other instruments issued in accordance with the guidelines or notification issued by the Reserve Bank of India

6 Inter Corporate Deposits:

Any amount received by the company from any other company

7 Amount received as subscription money for securities:

Any amount received and held pursuant to an offer made in accordance with the provisions of the Act towards subscription to any securities including share application money or advance towards allotment of securities pending allotment, so long as such amount is appropriated only against the amount due on allotment of securities applied for

8 Amount received from directors/relative of directors:

Any amount received from a person who, at the time of the receipt of the amount, was a director of the company or the relative of the director of a private company

9 Amount raised by issue of secured bonds/debentures:

A)Any amount raised by the issue of bonds or debentures secured by a first charge or a charge ranking pari passu with the first charge on any assets referred to in Schedule III of the Act excluding intangible assets of the company; or

(B) bonds or debentures compulsorily convertible into shares of the company within ten years

10 Amount raised through issuance of unsecured listed NCDs:

Any amount raised by the issue of non-convertible debentures not constituting a charge on the assets of the company and listed on recognized stock exchange as per applicable regulations made by Securities and Exchange Board of India

11 Non-interest bearing security deposit received from employees: 

Any amount received from an employee of the company not exceeding his annual salary under a contract of employment with the company in the nature of non-interest bearing security deposit

12 Non-interest bearing amount held in trust:

Any non-interest bearing amount received and held in trust

13 Any amount received in course of, or for the purposes of the business of the company:

(i)            As an advance for supply of goods or provision of services accounted for in any manner whatsoever provided that such advance is appropriated against supply of goods or provision of services within a period of three hundred and sixty five days from the date of acceptance of such advance.

(ii)           As advance accounted for in any manner whatsoever, received in connection with consideration for immovable property under an agreement or arrangement, provided that such advance is adjusted against such property in accordance with the terms of agreement or arrangement.

(iii)          As security deposit for performance of the contract of supply of goods or provision of services.

(iv)          As advance received under long term projects for supply of capital goods except those covered under item (b) of subclause (xii) clause (c) of sub- rule (1) of rule (2) of the Companies (Acceptance of Deposits) Rules, 2014.

(v)           As an advance towards consideration for providing future services in the form of a warranty or maintenance contract as per written agreement, if the period for providing such services does not exceed the period prevalent as per common business practice or five years, from the date of acceptance of such service whichever is less.

(vi)          As advance received and allowed by any sectoral regulator or in accordance with directions of Central or State Government.

(vii)         As an advance for subscription towards publication, whether in print or electronic to be adjusted against receipt of such publications.

(viii)        Any amount brought in by promoters of the company by way of unsecured loans in pursuance of the stipulation of any lending financial institution.

(ix)          Any amount received by a Nidhi company in accordance with the rules made under section 406 of the Act.

(x)           Any amount received by way of subscription in respect of chit under the Chit Funds Act, 1982(4 of 1982).

(xi)          Any amount received by company under any collective Investment scheme in compliance with regulations framed by the Securities and Exchange Board of India. Any amount of twenty five lakh rupees or more received by a start up company, by way of convertible note (convertible into equity shares or repayable within a period not exceeding five years from the date of issue) in a single tranche, from a person

14 Any amount received by a company from:–

(A) Alternate Investment Funds;

(B) Domestic venture Capital Funds;

(C) Infrastructure Investments Trusts;

(D) Real Estate Investment Trusts;

(E) Mutual Funds registered with the Securities and Exchange Board of India

Due date of submitting e-Form DPT-3:-

Particulars Date
One Time Reporting Within 90 days from the date of publication of the notification. The date of publication of the notification is January 22, 2019 therefore, the form has to be filed by April 21, 2019. (the updated version of the form to be filed is yet to be made available by the MCA)
Periodic Reporting By 30th June

Specified Companies (Furnishing of Information about payment to micro and small enterprises suppliers) Order, 2019-MSME Form I Compliance

Overview:- With a view to support Micro, Small and Medium Enterprises (MSMEs), the Ministry of Corporate Affairs (MCA) has recently issued a notification directing all companies that obtain supplies of goods/services from Micro and Small Enterprises to furnish and submit a one-time return (and subsequently every half year) with the MCA stating the following:
(1) The amount of payment due; and
(2) The reasons for the delay
with respect to such Micro and Small enterprises in a new e-Form MSME 1.

Date of notification: January 22, 2019

Applicability: To all the companies who get supplies of goods or services from micro and small enterprise and whose payment to micro and small enterprise suppliers are outstanding for over forty-five days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006

Reporting and due dates:

(1) For one-time reporting:- The first return in MSME Form 1 has to be filed by every specified company furnishing the details of all outstanding dues to Micro and Small enterprises suppliers existing as on the date of notification of this order i.e. January 22, 2019 within thirty days from the date of publication of this notification (However, the form is yet to be made available by the MCA and therefore, such 30 days will now be considered from the date the form is made available by the MCA).

(2) Half yearly return:- For the regular half yearly return in MSME Form 1 it has to be filed by every specified company as per the following timeline:-
• For the period April to September:- by 31st October of the same year
• For the period October to March:- by 30th April of the same year

Information to be furnished in MSME Form I:-
(1) Outstanding amount due to micro and small enterprises as on 22.01.2019 (for the one time return) and outstanding amount during the period April to September/October to March (for half yearly return).
(2) Name of Suppliers
(3) PAN of Suppliers
(4) Date from which the amount is due
(5) The reasons of delay in payment

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