India

MCA Imposes Penalty on Company and its Directors for Failing to Maintain Active Registered Office as Mandated under Section 12 of Companies Act [Read Notification]

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Company and Directors Face Penalty for Registered Office Violation: MCA Takes Action



Company and Directors Penalised for Not Maintaining Active Registered Office: MCA Cracks Down

The Ministry of Corporate Affairs (MCA) has taken decisive action against a company and its directors for allegedly failing to maintain an active and accessible registered office, a mandatory requirement under Section 12 of the Companies Act, 2013. The penalty follows repeated failed attempts by the Registrar of Companies (RoC), Andhra Pradesh, to conduct inspections at the company’s registered address.

RoC Andhra Pradesh Flags Non-Compliance

The RoC Andhra Pradesh initiated action after multiple attempts to inspect the company’s registered office proved futile. This raised serious concerns about the company’s compliance with the statutory requirement of maintaining a functional registered office, capable of receiving and acknowledging official communications.

Penal Action Under Section 454

Based on the findings, the MCA has levied penalties under Section 454 of the Companies Act, 2013, which pertains to penalties for non-compliance. The penalties are imposed both on the company and its directors for the violation. The exact amount of the penalty imposed has not been disclosed, but it reflects the seriousness with which the MCA views such breaches of corporate governance norms.

Importance of a Registered Office

The registered office of a company is its principal place of business and serves as the official address for all communications from regulatory bodies, stakeholders, and the public. Maintaining an active and functional registered office is crucial for:

  • Ensuring transparency and accountability in corporate operations.
  • Facilitating effective communication between the company and its stakeholders.
  • Enabling regulatory bodies to conduct inspections and ensure compliance with applicable laws and regulations.

This action by the MCA serves as a strong reminder to companies to adhere to all statutory requirements, particularly the crucial obligation of maintaining a readily accessible registered office.

Summary:

  • MCA penalised a company and its directors for violating Section 12 of the Companies Act, 2013.
  • RoC Andhra Pradesh initiated the action due to failed inspection attempts at the registered office.
  • Penalties were levied under Section 454 for non-compliance with registered office norms.
Key Takeaways:

  • Companies must ensure a fully functional and accessible registered office is maintained at all times.
  • Non-compliance with registered office requirements can lead to significant penalties for both the company and its directors.
  • The MCA is actively enforcing compliance with the Companies Act and taking strong action against defaulters.
  • This case highlights the importance of corporate governance and transparency in business operations.
  • Maintaining accurate records and promptly responding to regulatory inquiries are crucial for avoiding penalties.