Angel Tax

However, it is time for startups to breathe at ease as angel tax is about to be a thing of past. As per media reports, the income tax department has notified about 120 startups that they are exempted of angel tax.

Business daily Livemint reported that about 150 firms had applied for tax relief of which 120 have received the tag of ‘startup’. The intimation was sent to startups in the last few days under a new scheme announced in February which brings an end the much talked about angel tax in the startup community.

On February 19 this year, the Department for Promotion of Industry and Internal Trade (DPIIT), in an announcement, broaden the definition of a ‘startup’ and exempted investors and entrepreneurs from the so-called ‘draconian’ angel tax. As per the new norms, an entity is a startup up to 10-years of its establishment and its turnover hasn’t exceeded INR 100 crores.

Anuj Golecha, Co-Founder, Venture Catalysts says with the relaxation of angel tax norms, the government has given a major relief to startups. Earlier there were a lot of redundancies, stretched timelines, and red-tapism due to the procedures, which will now be eliminated.

“This move will further ensure a conducive environment and enable quick processes for budding entrepreneurs. These numerous measures have widened the scope of startups and eased investment in startups across the network, which is a very positive development,” he said.

Even though the government has addressed the problem, investors are now keen to understand if they could implement the notification smoothly. Anil Joshi from Unicorn Ventures is sure these reforms will evolve and the government will actively keep making changes as system demands.

“However, if they are not implemented properly then I fear that angels may dissociate themselves from investments as no one wants to get into scrutiny for investment from tax paid income,” he added.

What Next?

Now that angel tax will have been relaxed and it will haunt fewer startups, can India truly be startup nation? Well, honestly – there is a long way to go.

Presently, India stands tall among the top countries as a startup nation. However, at the ground, the government and ecosystem have a lot of work to do to truly call India a startup nation.

From StartupIndia to DigitalIndia, there have been several initiatives that have been kicked off by the central government while on the other side even states have tried to nurture entrepreneurship in their regions. But often while discussing regulator related issues, we often forget to seek Indian Inc’s participation to develop the ecosystem.

“We need active participation from corporates to make the ecosystem more vibrant.  They need to actively involve with startups for a solution and also actively scout for acquisition,” Joshi says.

On the other hand, Lakshmi Potluri-CEO, DCF Ventures says the efforts of both the state and central government have started to show. Having said, rural and non-tech entrepreneurs still need a lot of nurturing and handholding to grow into scalable businesses.

“Entrepreneurs outside tier I cities with great ideas are yet to be tapped and nurtured as access to information/mentors is limited or nonexistent. The ecosystem should look at creating opportunities to showcase a variety of startups to the industry in different domestic, industry shows, global platforms, etc.  Lastly, more cross border best practices exchange from successful ecosystems such as Israel, Germany etc., will be a wonderful opportunity and insight for those who are running such startup/entrepreneurship facilitation ecosystems,” she adds.

Source : Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Legal Complainces for StartUps

Startups are prone to go haywire in terms of delivery, execution, and setup costs. Amongst everything, it gets taxing to think and execute tasks related to tax. But this is an important financial element that one can not afford to overlook. A startup may incur losses in initial years and those go unaccounted. But then there are chances to save a new business from further financial losses by shielding it with tax benefits.

Here are five important tax tips for startups useful at many levels – from starting to each stage of progress.

1. Compliance With Tax Norms Makes Life Easier

As a startup, you would want to focus all your efforts and energies in offering better solutions to your customers. The entire concept of compliance is to set you free from other legal requirements and do what you do best – focus on core business. Tax norms help businesses to get clarity on implications of tax in the finances. Once done, the aim should be to have better financial planning by keeping in mind the applicable taxability and other compliance-related expenditures.

2. Hire/Consult Tax Professionals

Professionals in the industry can help you to execute all the necessary formalities, ensuring completion of all those nitty-gritty of the subject matter involved. For some, you will also need advice from tax experts on how to plan your finances by incorporating the tax implications concerned.

Opt for business professional services to ensure complete control over tax-related compliance. Having a professional consultant on-board will also help you prepare for any unforeseen contingencies. Expert opinion in the case of compliance is recommended in case of tax-related compliance queries.

3. Learn About the Broad Norms

Awareness plays a major role when it comes to knowing the legalities involved in running a business. And since the tax is one of the core concerns that new businesses have, an overall & general know-how becomes indispensable. It is essential that startups get acquainted with the applicable laws and provisions. Complying with such standards may prove to be a daunting task given the wide scope and comprehending deeper aspects involved. The Income Tax Act of India, 1961, allows legal authorities to strictly govern income tax along with rigorous checks and harsh penalties imposed upon defaulters.

4. Know Your Rights and Benefits as a Taxpayer

Tax regulations will certainly impact your business as it has its own set of implications that your business cannot escape from. The best thing is to know the rights that you enjoy as a taxpayer. For example, 100per cent tax exemption on profit gains for the first three years with the exception of Minimum Alternate Tax (MAT, 18.5per cent). Then there are exemptions on capital gain tax, the abolition of angel investment tax, and SEBI directed Funds of Funds. Such benefits must be observed and startups should leverage plenty such tax laws and regulation. Doing so will also improve the acceptability levels with VCs, investors, and banks.

5. Deeper Insights for Future Planning

Allocating resources is the key to the streamline all the other business activities and accordingly channelize the finances for the team. For better returns and future financial goals, avoiding taxation can prove disastrous. Startups should dwell deeper to gain important insights that will help those at the helm of affairs to take right decisions. You will learn to allocate resources – channel your finances for better returns – envision financial goalkeeping taxability in mind. There are chances that your future launch may get affected by the tax norms and other requirements. Ensure a tight watch over every minuscule change in the tax regime and align it for your business requirements.

Most of the new startups are stringent with taxation but they lack clear information since the subject has many branches associated with it. Startups should also ensure a pervasive compliance management system with Chartered Accountants, lawyers and tax professionals mentoring it. Try incorporating technology to manage all the compliances with utmost diligence to ensure timely tax payments and completion of all legal formalities pertaining to it.

Source : Press Reports

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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VidyaSunil & Associates

VidyaSunil & Associates is into practice of Tax Compliance, Company / Corporate Law Compliance, Accounts, Audit, Fund Raising, GST, Start Up Consultancy established with a objective to provide wide Spectrum of Activities under One Roof.

We aim to be part of your team & provide value added services in a smooth and efficient manner while leaving you to focus on developing your business. We provide a long-term solution that understands your business through personalized “Solution Based Consulting”.

Professional Services are catered in below mentioned expertise fields:

We provide the best advise & practice for Startups / SME / MSME on matters relating to Business Planning & Development, Mergers & Acquisitions (M&A), Business Valuation, Tax Compliance – (Direct & Indirect Taxes).

We are specialized in catering to IT / Non IT / Health Care & Startups – Out Sourced CFO Services / Virtual CFO Services: Accounting / Book Keeping (complaint with I GAAP / IFRS) including Implementation. MIS Reports, Cash Flow Analysis, Financial Modeling, M&A, Costing & Budgeting.

Tax Compliance includes Direct & Indirect Taxes ( including Handling of Litigations/ Attending to Personal Hearings ) Expertise services in Commercial Taxes – GST / KVAT, Central Excise, Service Tax, SEZ, STPI, Import Export Consultations, FEMA & Allied taxes.

Acting Consultant / Advisor & Mentor to various Startups / SME & MSME Ventures.

We are founded by a team of experts in accounting, auditing and taxation services as now grown and diversified into a multi-dimensional consulting firm having footprint not just in the conventional areas like Statutory Audit,  Internal Audit, GST Audit, Investigation but also in new sphere as well.

Our Services:

 We offer a wide array of professional services in the areas mentioned below: 

 Accounting and Payroll Services

︎Setting up of accounting system

︎Book keeping and general accounting services

︎Preparation of Financial Statements

︎Cash Forecasting

︎Budgeting

︎Financial reporting & Analysis

︎Liaison with Financial Institutions and  Banks

Strategizing, Planning and Compliance, Advisory and Representation

︎Direct Taxes (Income Tax, TDS, Wealth Tax)

︎Indirect Taxes (GST, PT & Others)

︎Assistance in Statutory Compliances

︎Filing of Income Tax Returns for Individuals, Partnership forms, LLP, Private Limited companies

︎Calculation, Review, Reconciliation, Payment & Filing of GST, PT, TDS, e-TDS, PF, ESI, etc.,

Statutory Registrations and Compliances

︎Registration of entities as a proprietary concern, partnership firm, private limited company, public limited company, trust, AOP etc 

︎Registration with different Statutory bodies of PAN, TAN, GST, Professional Tax, Shop & ︎Establishment (Labour Licence), Provide

︎Export & Import Licence, MSMED, etc.

︎Assistance for compliance with the procedures of company law including maintenance of statutory registers, filing of statutory return

︎Meetings and other day to day operational matters.

Looking forward to hear back from you for any support/assistance 

Advice for Connect :

VidyaSunil & Associates

Web : http://www.vidyasunilassociates.com

Cell No. : 9739834819 / 9480633382

Notice to Return Defaulter u/s 46 for not Filing Return – Under GST

On receiving notice in GSTR-3A Notice, the defaulter has to file the return within 15 days from the date of notice along with penalty and late fees.

GSTR-3A is a notice to return defaulter under section 46 r/w sections 62 of CGST Act, 2017 r/w CGST Rule 68.

For better understanding the above mentioned sections are reproduced below:

Sec 46 of CGST Act –

“Notice to return defaulters – Where a registered person fails to furnish a return under section 39, or section 44 or section 45 a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.”

Sec 62 of CGST Act,2017 –

“(1)Notwithstanding anything to the contrary contained in Section 73 or Section 74 where a registered person fails to furnish the return under section 39 or section 45 even after service of notice under section 46 , the proper officer may proceed to assess the tax liability of the said person to the best of his judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 or furnishing of the annual return for the financial year to which the tax not paid relates.

.(2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order shall be deemed to have been withdrawn. But the liability for payment of interest under sub-section (1) of section 50 or for the payment of late fee under section 47 shall continue”

Rule 68 of CGST Rules, 2017 –

“A notice in Form GSTR 3A shall be issued, electronically, to a registered person who fails to furnish return under section 39,or section 44 or section 45 or section 52.” 

♠ For non filers the late filing fees are as follows:

NIL Return: Rs 20/per day

Other: Rs 50/Day

Along with late fee interest on delayed payment is also applicable.

Format of Notice u/s 46 of the GST, Reproduced As below :

1.Being a registered taxpayers, you are required to furnish return for the supplies made or Received and to discharge resultant tax liability for the aforesaid tax period by due date. It has been noticed that you have not filed the said return till date.

2. You are, therefore, requested to furnish the said return within 15 days failing which the Tax Liability will be assessed u/s 62 of the Act, based on the relevant material  available with this office.

Please note that in addition to tax so assessed, you will also be liable to pay

Interest and penalty as per provisions as per provisions of the Act.

3. Please note that no further communications will be issued for assessing the liability.
4. The notice shall be deemed to have been withdrawn in case the return referred above, is filed by you before issue of the assessment order.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Capital Gains Tax Relief likely for Investors under New Government

With a view to give a further boost to the startup ecosystem in the country, DPIIT is considering exempting investors from capital gains tax when they exit a startup.

Once the new government takes over by the end of next month, the Department for Promotion of Industry and Internal Trade (DPIIT) is expected to moot the idea then.

This comes after the government decided to extend relief from angel tax to investors and entrepreneurs following hard lobbying by these groups. It now wants to examine the entire gamut of regulatory issues related to startups for a robust ecosystem.

As per a report appearing in ET, DPIIT is considering two alternatives to deliver this incentive — one, a blanket exemption, and two, a conditional exemption based on funds redeployed.

Earlier, a new section 54 EE has been inserted in the Income Tax Act for the eligible startups to exempt their tax on a long-term capital gain when same funds or a part thereof is invested in a fund notified by Central Government within a period of six months from the date of transfer of the asset.

The maximum limit, in this case, is Rs 50 lakh. Such amount shall be remain invested in the specified fund for a period of 3 years.

In another incentive, under Section 54 GB of the Income Tax Act, they get exemption from tax on capital gains arising from the sale of a residential house or plot if the amount of net consideration is invested in equity shares of an eligible startup.

The next set of planned incentives on capital gains shall cover all investments in startups.

While government official quoted in the report expressed that it would be difficult to exempt investors on the basis of income, DPIIT will suggest exemption from capital gains if investors would back local startups from exit money.

The proposed measure is tune with the framework in Singapore, HongKong and the UK where such angel investments get tax breaks if they reinvest them into startups. Startup investment, without doubt, has a higher risk profile than other assets, but the tax reliefs can help mitigate them to an extent.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Govt plans 3 days registration process for companies

The government is working on a plan to further simplify the process and shorten the time period for the incorporation of a company.

Under the new system, a single clearance with seamless registration of Permanent Account Number, Tax Account Number, Goods and Services Tax, Employee Provident Fund Organisation and Employee State Insurance Corporation, will lead to the completion of the process in flat three days.

With these measures, the Department for Promotion of Industry and Internal Trade (DPIIT) hopes the country shall scale up in the Ease of Doing Business ranking to enter the top 50, says a report appearing in ET.

There are, however, some teething issues which have to be taken care of. There are glitches in name reservation that is being sorted out by the MCA. Here the involvement of multiple agencies delays the clearance process. A seamless process is being proposed for registration with all central agencies being brought under a single layer.

Also, an alternative to authentication in place of digital signatures is proposed as a step to speed up registration.

In the World Bank ease of doing business index released in October last year, India had jumped 23 points to occupy 77th place. In the last two years, the country has climbed 53 notches as the government put special efforts in removing bottlenecks for businesses.

India’s effort in the direction also led to World Bank recognising India as one of the top improvers for the year. But it has a long way to go before it can catch up with China which is ranked at 46 place, the US (4) or even Singapore (2).

The indicators for the ranking that are taken into consideration by World Bank are starting a business, getting electricity, dealing with construction permits, getting credit, paying taxes and trading across borders.

The DPIIT has to cover a lot of ground in insolvency framework, ease of property registration, payment and refund of taxes and enforcement of contracts before it can really look forward to improving India’s ranking further.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Persons/Business Liable to Pay Professional Tax

• Salary or wage earners
• Legal practitioners
• Technical and Professional Consultants
• Chief Agents, Principal Agents, Special Agents, Insurance Agents and Surveyors or Loss Assessors
• Pigmy Agents or UTI Agents
• Chartered Accountants and Actuaries
• Medical Practitioners
• Engineers, RCC Consultants, Architects and Management Consultants-
• Member of Stock-Exchanges
• Estate agents or brokers
• Contractors executing works contract
• Race horse owners and trainers
• Self-employed persons in the motion picture industries
• Directors, Actors and Actresses (excluding Junior Artists), playback Singers, recordists, editors

(i) Income tax payees

(ii) other than (a) above

(b)    Cameraman and still photographers Ø  Persons registered or liable to be registered under the Karnataka Goods and Service Tax Ø  Employers of establishments under the Karnataka Shops and Commercial Establishments Ø  Owners of residential hotels or lodging houses Ø  Owners of cinema theatres but excluding touring talkies Ø  Owners of transport vehicles Ø  Money lenders Ø  Individuals or institutions conducting chit funds Ø  Cooperative Societies Ø  Banking companies Ø  Registered Companies Ø  Each partner of a firm engaged in any profession, trade or Calling. Ø  Agriculturists Ø  Photo laboratories, film processing laboratories and photo Studios Ø  Nursing home and hospital Ø  Beauty parlours, dry cleaners and inerior decorators- Ø  Film distributors Ø  Travel agents Ø  Journalists Ø  Advertising firms / agencies Ø  Persons using photocopying machines for job works Ø  Video cassette libraries Ø  Educational Institutions and Tutorial Colleges or Institutes Ø  Persons owning / running STD/ISD/FAX Booths Ø  Property Developers including Land Developers and Building /Flat Developers Ø  Persons owning / running, (a) Computer Institutes selling time, (c)     Computer Training Institutes / Driving Institutes / Technical Training Institutes Ø  Persons owning Marriage Halls / Kalyana Mantaps. Ø  Owners of bars and restaurants Ø  Licence Holders of distilleries Ø  Transport contractors including forwarding and clearing agents Ø  Authorised Assistant recognized by Stock Exchange Ø  Stock brokers, sub-brokers recognized by the Stock Exchange Board of India Ø  Agents of courier Service. Ø  Persons operating wireless services including pagers service. Ø  Persons operating mobile telephone service Ø  Persons providing internet service running internet cafes, information kiosks Ø  Persons operating e-commerce business Ø  Persons operating Air taxi and helicopter services (a) Persons running clubs including recreation clubs (b) Persons operating gymnasium Ø  Persons operating city-taxi services Ø  Persons providing bill boards Ø  Designers and landscaping consultants, Vastu, Fengshui and other similar consultants Ø  Persons running IT call centres Ø  Multi-system operators (TV singnal providers) Ø  Yoga and Reiki Training Centres Ø  Persons trading in REP licences and Exim scrips Ø  Persons running security services Ø  Private radio broadcasters and operators Ø  Astrologers, Astropalmists, Numerologists and Faith healers Ø  Persons engaged in maintenance or running of vehicle Ø  Persons owning or running places providing massage, sauna and other health and beauty improvement services. Ø  Persons acting as agents, consultants and the like for any company or firm engaged in any business VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services. Advise for contacting VidyaSunil & Associates; Website :  http://www.vidyasunilassociates.com E Mail ID : vidyasunilassociates@gmail.com Cell No. : +91 9739834819

Active Company Tagging Identities and Verification (ACTIVE)

The Ministry of Corporate Affairs has recently notified  Rule 25A: Active Company Tagging Identities and Verification (ACTIVE)

Who have to File E form INC-22A?

As per MCAs recent announcement, 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 further that companies which have been struck off or are under process of striking off or under liquidation or amalgamated or dissolved as recorded in the register, shall not be required to file e-Form ACTIVE.

What are the checkpoints involved in filing the eForm INC-22A (ACTIVE)?

Compliance to be checked before filing eForm ACTIVE:

Companies shall not be allowed to file the eForm ACTIVE, if:

1. Company has not filed its due financial statements under section 137 or due annual returns under section 92 or both with the Registrar shall be restricted from filing e-Form-ACTIVE, unless such company is under management dispute and the Registrar has recorded the same on the register.
2. Company has not appointedKMP (if mandatory)
3. Company has not appointed Company Secretary (Company having paid up capital of Rs. 5 Crore or more)
4. Company has not appointed CFO (Company having paid up capital of Rs. 10 Crore or more)
5. Company has not filed Form ADT-1 (Appointment of Auditor)

Mandatory Attachment in eForm ACTIVE:

• Photograph of Registered Office showing external building and inside office also showing therein at least one director/KMP who has affixed his/her Digital Signature to this form.
• eForm shall be digitally signed by one director in case of OPC. In case Company is other than OPC, form shall be digitally signed by one director and one KMP or two directors.

 What happens if eForm INC-22A (ACTIVE) is not filed within the due date specified?

In case a company does not intimate the said particulars, the Company shall be marked as “ACTIVE-non-compliant” on or after 26th April, 2019 and shall be liable for action under sub-section (9) of section 12 of the Act

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 –

(i) SH-07 (Change in Authorized Capital);

(ii) PAS-03 (Change in Paid-up Capital);

(iii) DIR-12 (Changes in Director except cessation);

(iv) INC-22 (Change in Registered Office);

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

Where a company files “e-Form ACTIVE”, on or after 26th April, 2019, the company shall be marked as “ACTIVE Compliant”, on payment of fee of Rs. 10,000/- (ten thousand rupees)”, without prejudice to any other action that may be taken.

Important Points

Filing of e-Form ACTIVE would be mandatory all the Companies (Private Ltd/Public Ltd/OPC) incorporated before 31^st December, 2017.

Due date of filing of e-Form ACTIVE is on or before 25^th April, 2019. 

Penalty of Rs. 10,000/- (Rupees Ten Thousand Only) for filing the eForm ACTIVE after the Due Date.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Cell No. : +91 9739834819

Statutory Registers prescribed – Companies Act, 2013

The Companies Act, 2013 (the Act) and the rules made there under (“the Rules”) lays down that every Company incorporated under the Act has to maintain Statutory Registers(“the Registers”).

The Registers need to maintained and updated eventually and should be kept at the Registered Office of the Company.  Section 128 of Companies Act states that, “every company shall keep at its registered office books of accounts and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of affairs of the company including that of its branch office and offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept at accrual basis and according to the double entry system of accounting.”

Following is a list of Books and Statutory Registers that a company is statutorily required to keep at its Registered Office –

Sr. No.	Relevant Section & Rules	Register
1.	Section 88 (1) and Rule 3 (1) of the Companies (Management and Administration) Rules, 2014	MGT-1: Register of Members
2.	Section 88 (1) and Rule 4 of the Companies (Management and Administration) Rules, 2014	MGT-2: Register of Debenture holders
3.	Section 88 (2) and Rule 6 of the Companies (Management and Administration) Rules, 2014	Index of Members
4.	Section 88 (2)	Index of Debenture Holders
5.	Section 88(3)	Register and Index of Beneficial Owner
6.	Section 88(4) and Rule 7 of the Companies (Management and Administration) Rules, 2014	MGT-3: Foreign Register of Members, Debenture holders, other security holders or beneficial owners residing outside India
7.	Rule 6 of the Companies (Share Capital and Debentures) Rules, 2014	Form SH-2: Register of Renewed and Duplicate Share Certificate
8.	Section 54 and Rule 8 (14) of the Companies (Share Capital and Debentures) Rules, 2014	Form SH-3: Register of Sweat Equity Shares
9.	Section 62 and Rule 12 (10)	Form SH-6: Register of Employee Stock Options
10.	Section 68 and Rule 17 (12) of the Companies (Share Capital and Debentures) Rules, 2014	Form   SH-10: Register of Shares or Securities Bought Back
11.	Section 170(1) and Rule 17 of the Companies (Appointment and Qualification of Directors) Rules, 2014	Register of Directors and KMPs
12.	Section 73 and Rule 14 of the Companies (Acceptance of Deposits) Rules, 2014	Register of Deposits
13.	Section 85 and Rule 7 of the Companies (Registration of Charges) Rules, 2014	Form CH-7: Register of Charges
14.	Section 186 and Rule 12 of the Companies (Meeting of Board and its Powers) Rules, 2014	Form MBP-2: Register of Loans/Guarantee/Security and Acquisition by Company
15.	Section 187 and Rule 14 of the Companies (Meeting of Board and its Powers) Rules, 2014	Form MBP-3: Register of Investments not held in its own name
16.	Section 189 and Rule 16 of the Companies (Meeting of Board and its Powers) Rules, 2014	Form MBP-4: Register of Contracts or Arrangements in which Directors are interested

Inspection and Maintenance of the statutory registers

The statutory registers are required to be open for inspection during business hours under the Companies Act, 2013.

The register of members has to be kept open for inspection by any member, debenture holder, other security holder or beneficial owner without payment of fees or by any other person on payment of fees not exceeding INR 50 for each inspection. The register of charges has to be kept open for inspection by any member or creditor without any payment of fees and by any other person on the payment of fees. The register of investments not held in its own name by the company has to be kept open for inspection by any member or debenture holder without any fee during business hours.

Such inspection powers are subject to any reasonable restrictions as the company may impose, by way of its articles of association. These may be in the nature of restrictions on business hours during a working day or notice requirements before such inspection. The Companies Act, 2013 specifically mentions that the reasonable time for inspection of the Register of Members cannot be less than two hours on every working day.

Electronic register

Under the Companies Act, 1956, the companies had no requirement to maintain the statutory registers in an electronic form. The Companies Act, 2013 now requires the following companies to mandatory maintain the statutory registers in an electronic form:

1. • Listed companies and
2. •  Companies having not less than 1,000 shareholders, debenture holders and other security holders

Companies not meeting the above criteria can choose to maintain the statutory registers in physical or electronic form.

All companies that maintain the statutory registers in electronic form are required to follow the guidelines prescribed under the Companies (Management and Administration) Rules, 2014. Broadly, these include the electronic statutory registers to be readable, retrievable and reproducible in printed form; statutory registers to be dated and signed digitally wherever required; statutory registers to be capable of updating; and adequate measures for the protection and security of the electronic statutory registers.

Penalty for non-compliance

Penalty for not maintaining the statutory registers have been prescribed under the Companies Act, 2013, wherein the company and every officer in default is punishable with the fine prescribed. The penalty for non-maintenance of the statutory registers varies. This fine can extend from INR 25,000 to INR 25,00,000. For certain statutory registers, if the failure to maintain the same is a continuing one, the fine can extend to INR 1,000 for every day, after the first during which the failure continues. The failure to maintain the following statutory registers could also attract imprisonment for every officer of the company who is in default:

1. • Register of shares or other securities bought-back: imprisonment for a term which may extend to three years
2. • Register of charges: imprisonment for a term which may extend to six months
3. •Register of loans, guarantee, security and acquisitions made by the company: imprisonment for a term which may extend to two years and
4. •Register of investments not held in its own name by the company: imprisonment for a term which may extend to six months

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Cell No. : +91 9739834819

KYC for Registered Office – eForm INC-22A (ACTIVE)

Ministry of Corporate Affairs (MCA) notified a new rule 25A by way of the Company (Incorporation) Amendment Rules 2019 with effect from 25^th February’2019.

Pursuant to this, all companies incorporated on or before December 31, 2017 have to file e-form – ACTIVE (form INC – 22A) by April 25, 2019. In this post, we will discuss Rule 25A and Form Active Company Tagging Identities and Verification  (ACTIVE) which technically is Form INC – 22A.

Applicable Section/Rules– Rule 25A of Companies (Incorporation) Rules, 2014 and also Read with Section 12 of Companies Act, 2013.

Time Limit– On or before 25^th April, 2019

The Key Information to be gathered for filing of the Form are :

1. Registered Office Address
2. Geolocation (Latitude and Logitude)
3. Photograph of Registered office showing
   1. External view of building and
   2. Inside view of building with at least one Director / KMP who sign the form
4. Email ID of Company – to be Verified by an OTP
5. Details of all director (All directors DIN KYC must be activated).
6. Details of Statutory Auditor
7. Details of Cost auditor if any
8. Details of Company Secretary if any.
9. Information about Annual Return and Balance Sheet filed for the year 2017-18

Attachments:

1. Photograph of Registered Office showing external building including name of the company, address of its registered office, Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any painted or affixed.

2. Photograph of inside office along with atleast one Director/KMP who is signing the form.

Additional Key Points / Important Note :-

• Even Dormant companies need to file INC-22A
• Annual Filing should be up to date.
• E-mail ID should be unique for every company. Even in case of group companies under same management each and every company should have its unique E-mail ID.
• All Directors in the company should have “APPROVED” status of DIN.
• All companies who are required to appoint ‘Company Secretary’ as per the statutory requirement need to appoint ‘Company Secretary’ before filing INC-22A, if not appointed.
• In case of Section 8 company, if designation is selected as ‘Company Secretary’ enter either Membership No. /PAN.

Penalty for Non-Filing- Fine of Rs. 10000/- on or after 26^th April, 2019

Consequences of Non-Compliance- MCA will mark the form as ‘ACTIVE non-compliant’ unless “e-Form ACTIVE” is filed and the company will be barred from filing OR will not be able to file following forms:

(i) SH-07 (Change in Authorized Capital);

(ii) PAS-03 (Change in Paid-up Capital);

(iii) DIR-12 (Changes in Director except cessation);

(iv) INC-22 (Change in Registered Office);

(v) INC-28 (Amalgamation, De-merger)

Companies not required to file this form-

• Company which has not filed its due financial statements under section 137 or due annual returns under section 92 or both
• Companies which have been struck off or are under process of striking off
• Company which is under liquidation or amalgamation
• Company which has been dissolved

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

Advise for contacting VidyaSunil & Associates;

Website :  http://www.vidyasunilassociates.com

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819