diff --git a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/group/domain/Group.java b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/group/domain/Group.java
index baa305742..5674c300a 100644
--- a/mifosng-provider/src/main/java/org/mifosplatform/portfolio/group/domain/Group.java
+++ b/mifosng-provider/src/main/java/org/mifosplatform/portfolio/group/domain/Group.java
@@ -107,11 +107,13 @@ public final class Group extends AbstractPersistable<Long> {
             final Set<Client> clientMembers, final Set<Group> groupMembers) {
 
         GroupingTypeStatus status = GroupingTypeStatus.PENDING;
+        LocalDate groupActivationDate = null;
         if (active) {
             status = GroupingTypeStatus.ACTIVE;
+            groupActivationDate = activationDate;//set activation date only if group is made active
         }
 
-        return new Group(office, staff, parent, groupLevel, name, externalId, status, activationDate, clientMembers, groupMembers);
+        return new Group(office, staff, parent, groupLevel, name, externalId, status, groupActivationDate, clientMembers, groupMembers);
     }
 
     public Group(final Office office, final Staff staff, final Group parent, final GroupLevel groupLevel, final String name,