A. C. T .I. V .E

April, 2019

The Year was 2012. Dr. Atreya, promoter of a health-care enterprise which was in the product-POC stage would always barge into our office with a smile on his face and a compact, loaded leather bag in his hand. The bag contained his entire office – all share certificates, meeting notices, minutes, visiting cards, common seal, rubber stamps, stapler, clips, pens, pencils, notepads, photographs, DSCs, his laptop etc. etc. He would be always prepared – to ‘rubber stamp’ any document with the quintessential blue or black ink and sign on it. After signing umpteen number of documents he would joke “If required, I can stamp the director seal on my forehead too. Have a broad one.” ☺ While he had his apartment for his registered office, he was always on the move, meeting people. His work never required him to work out of a fixed place. Each time we quizzed him where his office was, he would make a grand statement “The broken bench in Cubbon Park (a huge green space in the heart of Bangalore) under the huge banyan tree where I meet all my prospective employees and investors. No fan, no electricity, no furniture required. Open air, open thoughts, open discussions.” We would all laugh imagining the broken-bench. More so the affable way in which Dr. Atreya would put it.

Cut to 2019. Government is having the last laugh now. How will one satisfy the ACTIVE form filing requirement if one were to operate from his apartment or Cubbon Park ? Technology has given us the freedom of working from garages, dining rooms, bedrooms, kitchen tops, cafes, cars, buses, airplanes, coworking spaces – literally anywhere on planet Earth. Having a brick and mortar office is an option until certain scales are reached. Or so all the entrepreneurs thought. Starting on shoe-string budget with work-from-your-own-space concept, physical office was not a requirement except for registering purposes. Not any more with the introduction of filing INC22A (A.C.T.I.V.E) by every company registered with the Ministry of Corporate Affairs. This calls for the director to take a photograph of himself sitting inside the registered office, another photo outside the office building indicating the latitude and longitude and filing it online on the MCA portal using the services of a professional. Well, the purpose of the Government obviously is to target shell companies and scam promoters who register companies for dubious purposes and hence do not require physical offices. All of you are aware of how a single address serves as registered office for hundreds of companies. But then the model of shared office spaces, co-working spaces, business centres etc. in which startups like Dr. Atreya’s thrive throws up issues in complying with the government diktat.

Whatever may be the intention of the Government and however ridiculous the whole exercise may seem, do we have a choice ? The directive must be complied with both in letter and spirit. While there are genuine compliance difficulties, it is unfortunate that many companies are trying to find work-around using technology (read photoshopping of building and director photos) or appointing ‘temp-directors’ only for this purpose. Worse still, despite being in responsible positions, they expect Company Secretaries who are supposed to be ‘Chowkidars (sentinels) of Corporate Governance’ to help them find ‘other ways’ to comply. Agreed that as professionals we need to have a ‘solution-oriented approach’ but definitely not when it is a straight-jacketed matter such as filing a form that verifies the existence of a physical registered office of a legal entity and its director in ‘flesh and blood’. Any deviation is going to cost both the director and the Company Secretary heavily. No wonder our Institute of Company Secretaries of India (ICSI) has issued an Advisory to thwart such deviations, asking us to play our ‘Chowkidar’ roles in letter and spirit. Government trusts us. Public trusts us. Corporates trust us. Our mantra should be “Don’t break the Trust.” !!

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