In a business world that is so tightly regulated today, companies have little choice but to comply with many laws and regulations. As compliance becomes a critical part of the company's ongoing existence, the Ministry of Corporate Affairs (MCA) in India has implemented various methods to promote the accuracy of corporate records and the accountability of corporations registered under the Companies Act 2013. A major area where non-compliance can lead to serious consequences is the filing of e-Form ACTIVE (INC-22A). Many corporations, particularly inactive, small and/or dormant companies, tend to either forget or delay filing this form even though it is very important. Failing to comply with the INC-22A filing requirements can have serious implications not only for the regulatory status of the corporation but also for day-to-day business operation and potentially result in penalties, operational limitations and legal liabilities. In this blog, you will find an all-inclusive discussion about the consequences of failing to file e-Form ACTIVE (INC-22A), the penalties for non-compliance, and the operation restrictions and risks of legal liability that may result from non-compliance and how companies can work to bring themselves back into compliance through the filing of INC-22A service in India.
Understanding e-Form ACTIVE (INC-22A)
The new e-Form ACTIVE lets the State of Maharashtra's Company Registration Unit prove the existence and status of Indian companies. One of the primary intentions of introducing e-Forms (such as these) is to help prevent the growing abuse of shell companies by encouraging companies to maintain accurate corporate records and promote greater openness in the way companies operate and manage themselves.
The e-Form ACTIVE requires companies to provide key pieces of information, including:
• Address of registered office;
• Latitude and longitude of address;
• Photos of the inside and outside of the registered office;
• Directors' tile;
• Auditor Title;
• Where applicable to provide Secretary title.
Once a company files e-Form ACTIVE with the necessary details and the form is accepted by the MCA, the company will be designated as "ACTIVE-compliance" within the MCA portal.
The e-Form ACTIVE applies to all registered (MCA Incorporated) companies that are incorporated before a specified cutoff date published by the MCA, with the exception of the following types of companies:
• Companies that have been struck off;
• Companies that are currently in liquidation;
• Companies that are in the process of amalgamation or dissolution.
All of the other eligible companies must comply with filing e-Form ACTIVE before they can submit a complete and accurate submission for a new provisional Registration. Noncompliance with filing could result in substantial limitations being imposed on a company’s ability to conduct business activities, whether the company is currently in operation or remains dormant.
Key Information Required While Filing INC-22A
In order to understand the implications of noncompliance, it is essential to be aware of the requirements set forth by the MCA when completing and submitting Form INC-22A. The following information will need to be provided when completing Form INC-22A for your corporation:
• The registered office's address, along with its corresponding latitude and longitude.
• An image of the registered office that includes the nameplate.
• Information related to the corporation's directors (i.e., all directors must have an active Director Identification Number (DIN) status).
• Information regarding the corporation's statutory auditor(s).
• Information regarding the corporation's cost auditor(s), if applicable.
• Information regarding the corporation's company secretary, if applicable.
Any discrepancies or incorrect allocations of information may result in a rejection of your application and/or penalties being assessed to your corporation.
Who Is Required to File INC-22A?
All companies that existed on or before December 31, 2017 must submit this form unless one of the following conditions applies:
• The company was dissolved
• The company is currently being liquidated
• The company is currently being amalgamated
• The company was struck off the register
If your company is eligible to submit this form and it fails to do so, the consequences will have a direct effect on your company legally.
Why Filing INC-22A Is Not Optional
Most companies think that missing one form will not affect their operations. The INC-22A form is considered a compliance-based status indicator. A company's INC-22A filing establishes whether the company is listed in MCA records as being an "ACTIVE-Compliant" or "ACTIVE-Non-Compliant".
The classification of the company's filing has a direct correlation with the companies:
Regulatory Reliability
Future Filings
Business Growth
Investor Confidence
Legal Standing
Why Filing INC-22A Is Mandatory
As stated previously, the MCA has mandated that all Companies incorporating prior to (insert cut-off date) shall file e-Form ACTIVE pursuant to the Act. The MCA enacted this Regulation for the purposes of:
• Elimination of Shell Companies
• Elimination of companies that are not carrying on bona fide commercial activities
• To promote effective Corporate Governance
• To increase transparency and trust in the corporate environment.
Failure to submit INC-22A, therefore, should not be viewed as a minor administrative error; rather, it will be considered a breach of the statutory obligations.
What Happens If a Company Does Not File INC-22A?
When a company fails to comply with any requirements, particularly if it fails to file INC-22A form, the MCA has instituted strict penalties to ensure compliance with this mandate. Below are a few examples of what happens when you do not submit the INC-22A form:
1.Status Designated 'ACTIVE - Non-Compliant' on MCA Portal
Once the INC-22A form has been submitted, the immediate effect is that the designation of 'ACTIVE - Non-Compliant' will appear against the Company on the MCA Portal, and all interested parties can see this designation. The public designation of 'ACTIVE - Non-Compliant' demonstrates the company's ineffective governance, and any person performing a Due Diligence on the company will immediately notice this designation as a potential red flag.
2. Increased Government Fees for Late Filing
When a Company does not file the INC-22A form within the stipulated time frame, the Company will incur additional costs in the form of a late filing fee from the Government when the Company files the INC-22A form. Although the amount charged as a base fee to file the INC-22A form is not excessive, the penalty for filing late increases the amount that must be paid by the Company and is therefore a financial burden to the Company that could have been avoided by using a professional service to file the INC-22A form and ensuring timely submission.
3. Restrictions on Filing MCA Forms of Importance
An unfortunate byproduct of being deemed non-compliant with the MCA, is that the company will be prevented from filing several key MCA forms. As an ACTIVE-non-compliant company, it will be prohibited from filing:
• PAS-3 (Share Allotments)
• DIR-12 (Director Appointments/Resignations)
• INC-22 (Changes to Company Registered Address)
• SH-7 (Changes to Share Capital)
As a consequence, such restrictions could completely halt a company's potential to expand, restructure or undertake internal changes to its organization.
4. Director & Management's Decision(s) Impact
When directors do not file Form(s) appointing or resigning as director, companies experience operational shutdowns or temporary disruptions. Operational paralysis directly impacts a company's governance structure, management decision(s), and corporate statutory compliance obligations.
If there are urgent needs for: 1) A newly appointed Director, or 2) A Director resigning, and if in all cases if there is non-compliance with INC-22A, the company may face various legal and/or administrative complications.
5. Difficulty in Availing Banking and Financial Services
Banks and financial institutions often verify a company’s compliance status on the MCA portal before approving loans, opening bank accounts, or processing major financial transactions.
An ACTIVE-non-compliant status can result in:
This can severely affect the company’s cash flow and expansion plans.
6. Amplified chance of Increased Regulatory Scrutiny
If businesses fail to comply with INC-22A by not making necessary updates to registered office addresses or supplying false or incomplete information, they will incur a higher risk of attracting extensive regulatory scrutiny. Furthermore, these companies run an increased risk of subsequent penalties, notices of non-compliance, or additional audits due to being placed on a ‘high-risk’ watch list.
7. Decreased Business Credibility and Trust
In today’s information-dense world, businesses can readily determine their compliance with applicable laws and regulations. In order to protect themselves from potential risk and protect their investment, vendors, customers, investors, and business partners perform background checks on potential new business partners prior to entering into business relationships.
A non-compliance status could:
• Hurt the reputation of Brands
• Decrease the confidence of Investors
• Adversely affect long-term business relationships
For growing companies and start-ups, this professional credibility loss can be even more severe.
Why Timely INC-22A Compliance Is Critical
Filing INC-22A is not merely about avoiding penalties—it is about maintaining a company’s legal identity and operational freedom. Timely compliance ensures:
Companies that proactively follow the File INC-22A Process demonstrate strong governance and commitment to statutory responsibilities.
File INC-22A Process: Step-by-Step Overview
By knowing how the INC-22A Form process works, Businesses can Stay away from mistakes and delays; generally, the steps for the Process of Filing INC-22A are as follows:
1. Verify that the Company is Eligible
2. Check that the Directors of the Company have Active Directors Identification Numbers (DIN)
3. Verify the Statutory Auditor has been appointed
4. Update the Registered Office Details (if Necessary)
5. Take pictures of the Registered Office with geographic coordinates identified in the photograph
6. File the INC-22A Form online using the MCA Portal and sign electronically
7. Pay the Required Filing Fee
Due to the technical aspects involved, and documentation required to support the filing, many companies opt to use Professional Services to assist them in Filing the INC-22A Form in India.
Importance of Filing e-Form ACTIVE (INC-22A)
Do you want your business to run smoothly without interruptions? If so, you must file your INC-22A form on time!
Reasons to File Your INC-22A Form on Time:
1. Your INC-22A filing verifies that your Company is Operational.
2. Filing all the required Statutory Filings on Time will continue.
3. You will have Clean MCA Compliance Records.
4. Your Company will be viewed as Trustworthy by both Investors and Regulatory Authorities.
5. You will Avoid Paying Unnecessary Penalties and Restrictions. When you use a Professional File INC-22A Services Company in India, you get an Accurate Filing, Submitted on Time, plus Peace of Mind!
Impact of Non-Filing INC-22A on Long-Term Business Growth
A single missed opportunity in filing INC-22A may cause a ripple effect of negative consequences that will follow your company long into the future, which is why many businesses tend to underappreciate the impact of a compliance lapse.
The failure to file INC-22A may cause:
• Delayed expansion plans
• Legal bottlenecks
• Increased costs later for compliance
• Increased scrutiny from regulatory authorities
These types of delays will create losses that your company can never recover within a competitive market.
Common Mistakes to Avoid While Filing INC-22A
Even though many businesses strive to comply with the rules and regulations, mistakes can still happen resulting in their applications being denied or delayed, unless then corrected. The following is a list of some the more common errors that you should try to avoid:
1.Incorrect Registered Office Information
If the registered office address does not match on all the documents submitted supporting your application, it will typically result in your application being denied.
2. Improper Photograph of Registered Office
The photograph must clearly display:
• Company name
• Address
• Inside and outside views
3. Directors Have Not Finished Their KYC by Completing DIR-3 KYC
In order to file for INC-22A, directors must have finished the KYC process under DIR-3 KYC.
4. Out of Date Auditor or Company Secretary Details
An outdated professional detail will result in your filing being marked as a technical error.
5. Filing INC-22A Without Assistance from a Professional Service
When businesses try to file their own INC-22A forms, they are usually making errors that increase their compliance risk because of the lack of knowledge they have on the subject. Hiring an experienced INC-22A filing service will usually reduce these errors.
Why Companies Fail to File INC-22A
The following are common reasons why companies do not file their annual financial statements, including:
• A lack of awareness regarding the filing requirement;
• The business is dormant or inactive;
• The company does not have an updated registered office address;
• The company's directors have deactivated or not complied with KYC requirements;
• The company does not have professional support to assist with compliance.
Regardless of the reason for not filing, the Ministry of Corporate Affairs (MCA) does not provide any exemption to companies from penalties.
Long-Term Risks of Ignoring INC-22A Compliance
Companies that continue to ignore this mandate expose themselves to:
In an era where compliance status is publicly accessible, non-compliance is no longer invisible.
Consequences of Continued Non-Compliance
The consequences of failing to comply with INC-22A for an extended period of time will subject your business to:
• Increased scrutiny from the regulatory authorities
• Difficulty in filing future documents
• Will increase your risk of being treated as a dormant or shell entity
• Lose out on business opportunities
Complying with INC-22A is an obligation as well as being critical for successfully managing a company.
Conclusion
When a company does not comply with the e-Form ACTIVE (INC-22A), it can face ramifications that go well beyond fines. Such ramifications may include limits on the company's ability to operate; additional risk to their style of governance/management; exposure to a loss of reputation; and being subject to an increased amount of regulatory scrutiny. All these negative impacts can have a very serious negative effect on the growth and stability of a company. By acknowledging how important this mandate is to companies and correctly filing the INC-22A, businesses will protect themselves from being out of compliance and allow them to continue operating their business without interruption. By using a reputable File INC-22A Service in India, businesses will have the ability to concentrate on growing their company with complete confidence and clarity.
FAQs on INC-22A Compliance
1. Is INC-22A filing mandatory for all companies?
Yes, INC-22A filing is mandatory for all eligible companies incorporated on or before the prescribed cutoff date, except those exempted by the MCA.
2. Can a dormant or inactive company skip INC-22A filing?
No, unless specifically exempted, dormant or inactive companies are also required to file INC-22A to confirm their registered office details.
3. What is the penalty for late filing of INC-22A?
Late filing attracts an additional government fee. The company remains marked as ACTIVE-non-compliant until the form is successfully filed.
4. Can a company file other MCA forms without INC-22A compliance?
No, several important forms cannot be filed if the company is marked as ACTIVE-non-compliant.
5. Is professional assistance recommended for INC-22A filing?
Yes, using a professional INC-22A form filing service helps avoid errors, rejections, and unnecessary delays.
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