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Modi government rounding up on shell companies with new MCA update

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Archi Bhatia
Archi Bhatia
Archi Bhatia is a content writer who is also a qualified lawyer.She is affiliated with QuickCompany which deals in Company Registration, Company Search, Trademark Registration in India, Trademark Search and Other Legal Activities.

MCA has announced new verification for the firms and companies with the introduction of E-form Active” after the passing of the new amendment for company rules 2019.

This new mandatory compliance tightens the noose around the dummy corporations that are opened and closed overnight. The stringent KYC regulation is compulsory for all the 12 lakh companies that are currently active in India and are present in the MCA master data.

Companies new amendment makes active company tagging and verification as per the 2019 company rules mandatory. The said compliance for the companies is to be completed before 25th April 2019, or the company will be charged a heavy Fine of Rs. 10,000.

Applicability

The companies falling under the ambit of the new amendment are companies that are registered on or before 31st December 2017. Further, companies need to have complete annual compliance and financial statement with the MCA.

Exempted Companies:

Few of the companies that have been exempted from completing the compliance with government are:

  • The companies that have been struck off or are under the process.
  • The companies that are being liquidated.
  • The companies that are amalgamated or are being dissolved.
  • Companies that were registered after 31st December 2017

The companies that do not complete the mandatory compliance within the prescribed time i.e 25 April 2019 will be charged a heavy penalty of Rs.10,000 and the company will be marked as ” ACTIVE: Non-compliant” in the MCA roster.

The following tag will only be removed once the compliance is completed and the penalty is paid. Remember the companies have not yet filed their financial statement and annual compliances will not be able to complete the said compliance

Hence the roundabout comes that companies that are formed as a dummy corporation are no longer be able to survive these stringent policies and eventually the Modi government will catch up on these defunct companies and bring them down.

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Archi Bhatia
Archi Bhatia
Archi Bhatia is a content writer who is also a qualified lawyer.She is affiliated with QuickCompany which deals in Company Registration, Company Search, Trademark Registration in India, Trademark Search and Other Legal Activities.
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