The deadline for new disclosure norms that require companies to upload pictures of their registered premises and at least one director may be extended, likely giving temporary relief to startups.
The last date for companies to submit INC 22 form, which ensures compliance with these norms, is April 25.
The ministry of corporate affairs has received representations from industry associations, including startups. The startup community, in particular, was riled about these norms that came soon after the resolution of the angel tax issue. A large number of startups operate out of business suites or homes of their directors. “It is being looked into….Some more time could be given for compliance,” said a government official. The new norms came into effect in February this year and are part of the government’s crackdown on shell companies.
Companies have to upload a photo of the external profile of the registered office showing the nameplate, including CIN, registered address, e-mail and phone numbers, besides photos of the internal premises of the registered office. These photos must include at least one director who would also sign the form.
“LocalCircles had received complaints from startups about the impracticality of putting the company board on buildings as many of them operate out of shared and small spaces,” said Sachin Taparia, chairman, Local-Circles. Taparia said that Local-Circles has told the MCA about these complaints. “We have been advised by MCA that they are considering the extension request,” he said, adding that Local Circles counts over 30,000 startups as members of its online community. “They will likely come up with a revised form and a revised date soon as per their inputs to us.”
The new e-form INC 22A, which is also known as e-Form ACTIVE (Active Company Tagging Identities and Verification), was notified as part of Companies (Incorporation) Amendment Rules, 2019.
There is no fee charged if the form is filled within due date, but companies will have to pay Rs 10,000 by way of penalties after the deadline of April 25. A company that does not comply would also not be able to make changes to its capital structure or go ahead with merger or amalgamation deals.
“When the government had deleted the names of a number of shell companies, there was a lot of criticism. So now they are asking people to come forward and claim existence before…,” said Pavan Vijay, founder of Corporate Professional.