MCA seeks more details from Companies to put a check on shell firms
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Experts say the move would increase the compliance burden on companies and be good for the economy in the long run.
Companies will have to give details of their location, photographs of their registered office, displaying external and inside portions, and also show at least one director.
All these would help authorities identify cases of multiple shell companies using one building.
The e-form ACTIVE-1 has to be filed by April 25, according to changes in the Companies (Incorporation) Rules by the ministry of corporate affairs, effective from February 25.
If filing is not done, companies will face action that includes striking off their names from registers. Such companies will be termed ACTIVE-non compliant. The ministry of corporate affairs has directed the registrar of companies to reject requests for change in authorised capital, paid up capital, registered office, amalgamation and de-merger from non-compliant companies.
Companies that have not filed financial statements or annual returns will be barred from filing ACTIVE returns.
A late fee of Rs 10,000 would be levied in case the ACTIVE form is submitted after April 25.
Sandeep Jhunjhunwala, director at Nangia Advisors (Andersen Global), said, “Though the incremental changes burden Indian corporations with newer compliances, in the long-run, it will give the required impetus for the desired growth of the Indian economy.” #casansaar (Source - Business Standard)
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