Start-up founders now need pictures to prove their business’ existence

Last Updated at: July 17, 2020
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Start-up founders now need pictures to prove their business' existence
Start-up founders now need pictures to prove their business’ Existence

The Government in the recent few months has been aggressively trying to plug escapes in the start-up ecosystem to ensure that only genuine businesses get the perks of tax saving and angel investments. With digitization and foreign investments strengthening our startup network, there are many more funding routes available now than what was accessible to startups in India years ago. With this boom, several creative ways came to be devised to clandestinely convert black money to a regular investment, under the garb of lending to startups.  

The most recent addition to the host of regulations that have come to be enforced on start-ups is the mandatory requirement to update details such as the pictures of the office from inside and outside, latitude, longitude etc. In this post, we highlight the requirements under Form 22A (Active Companies Tagging Identities and Verification), for active status verification of a company.

Register Your Startup Business

Applicability:

Any company incorporated on or before 31 December 2017 shall file in e-Form ACTIVE (Active Company Tagging Identities and Verification) with the company’s data and its registered office details. It is free of cost to do so till this due date, after which the form can be filed only after paying a penalty of Rs. 10,000 to the Registrar of Companies.

What happens when the form is not filed?

If no request for recording the requisites is received, such companies are marked as “ACTIVE-non-compliant”. Such companies are barred from filing the following forms:

(i) SH-07 (Change in authorized capital);

(ii) PAS-03 (Change in paid-up capital);

(iii)DIR-12 (Changes in director except for cessation);

(iv) INC-22 (Change in registered office);

(v) INC-28 (amalgamation, de-merger)

Details required to be filed to retain the ‘Active’ status:

  1. Name of the Company and CIN
  2. The registered address of the company
  3. Two photographs of the registered office of the company. The images of the registered office must show at least one KMP director affixed with his/her digital signature, showing the external building and inside of the office.

What to do before you submit the INC 22A E-Form?

Besides the date of incorporation, some criteria must be fulfilled before you fill out this form.

KYC Director Identification Number (DIN) for Executives

DIN KYC must have been filed for all the Directors. If a Director DIN is deactivated as a result of KYC / Disqualifying ‘s non-filing of Sec.164, the company can not file ACTIVE.

Filing of ADT-1

ADT-1 would have been submitted by the Company for Auditor appointment. The statutory auditor information may be filled out in Form INC 22-A automatically and are to be named on or after 31st March of that financial year. When it is not done, before filing the INC-22A, the company must file ADT-1.

Companies ‘ Annual Filing

The company must submit both the financial year accounts and annual returns.

The requirement of Cost Auditor (Only if required)

The company when needed can appoint a Cost Auditor. For this, the company should have filed Form CRA- 2. If not, the company needs to File CRA- 2 before filing INC-22A.

Whole Time Director (WTD) or MD / Manager appointment (when required)

If it has to name a CEO / MD / Manager or a WTD, it should have done the requisite fillings before the INC-22A is submitted.

CFO appointment (only where necessary)

If a company requires a Chief Financial Officer (CFO), it needs to submit the request before INC-22A is filed. A company that has a paid-up share capital of 10 Crores or higher, will require a CFO.

Company Secretary appointment (when required)  

If the company must appoint CS, the respective filings should be submitted before INC-22A is submitted. If the company has 5 crores or more paid-up share capital, then it will require a full-time company secretary.

 

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Start-up founders now need pictures to prove their business’ existence

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The Government in the recent few months has been aggressively trying to plug escapes in the start-up ecosystem to ensure that only genuine businesses get the perks of tax saving and angel investments. With digitization and foreign investments strengthening our startup network, there are many more funding routes available now than what was accessible to startups in India years ago. With this boom, several creative ways came to be devised to clandestinely convert black money to a regular investment, under the garb of lending to startups.  

The most recent addition to the host of regulations that have come to be enforced on start-ups is the mandatory requirement to update details such as the pictures of the office from inside and outside, latitude, longitude etc. In this post, we highlight the requirements under Form 22A (Active Companies Tagging Identities and Verification), for active status verification of a company.

Register Your Startup Business

Applicability:

Any company incorporated on or before 31 December 2017 shall file in e-Form ACTIVE (Active Company Tagging Identities and Verification) with the company’s data and its registered office details. It is free of cost to do so till this due date, after which the form can be filed only after paying a penalty of Rs. 10,000 to the Registrar of Companies.

What happens when the form is not filed?

If no request for recording the requisites is received, such companies are marked as “ACTIVE-non-compliant”. Such companies are barred from filing the following forms:

(i) SH-07 (Change in authorized capital);

(ii) PAS-03 (Change in paid-up capital);

(iii)DIR-12 (Changes in director except for cessation);

(iv) INC-22 (Change in registered office);

(v) INC-28 (amalgamation, de-merger)

Details required to be filed to retain the ‘Active’ status:

  1. Name of the Company and CIN
  2. The registered address of the company
  3. Two photographs of the registered office of the company. The images of the registered office must show at least one KMP director affixed with his/her digital signature, showing the external building and inside of the office.

What to do before you submit the INC 22A E-Form?

Besides the date of incorporation, some criteria must be fulfilled before you fill out this form.

KYC Director Identification Number (DIN) for Executives

DIN KYC must have been filed for all the Directors. If a Director DIN is deactivated as a result of KYC / Disqualifying ‘s non-filing of Sec.164, the company can not file ACTIVE.

Filing of ADT-1

ADT-1 would have been submitted by the Company for Auditor appointment. The statutory auditor information may be filled out in Form INC 22-A automatically and are to be named on or after 31st March of that financial year. When it is not done, before filing the INC-22A, the company must file ADT-1.

Companies ‘ Annual Filing

The company must submit both the financial year accounts and annual returns.

The requirement of Cost Auditor (Only if required)

The company when needed can appoint a Cost Auditor. For this, the company should have filed Form CRA- 2. If not, the company needs to File CRA- 2 before filing INC-22A.

Whole Time Director (WTD) or MD / Manager appointment (when required)

If it has to name a CEO / MD / Manager or a WTD, it should have done the requisite fillings before the INC-22A is submitted.

CFO appointment (only where necessary)

If a company requires a Chief Financial Officer (CFO), it needs to submit the request before INC-22A is filed. A company that has a paid-up share capital of 10 Crores or higher, will require a CFO.

Company Secretary appointment (when required)  

If the company must appoint CS, the respective filings should be submitted before INC-22A is submitted. If the company has 5 crores or more paid-up share capital, then it will require a full-time company secretary.

 

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Avani Mishra is a graduate in law from the National Law Institute University, Bhopal. She qualified the Company Secretary course with an All India Rank 1 and is a recipient of the President’s Gold Medal for her academic distinctions. She also holds a B.Com degree with a specialization in Corporate Affairs and Administration.